Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

ANGLIAN WATER AUTHORITY BILL [Lords] (By Order)

Order for Second Reading read.

To be read a Second time upon Thursday next.

SCOTTISH TRANSPORT GROUP (CASTLE BAY PIER) ORDER CONFIRMATION BILL

Read the Third time and passed.

Oral Answers to Questions — NORTHERN IRELAND

Security Forces

Mr. Biggs-Davison: asked the Secretary of State for Northern Ireland whether he will make a statement about the public relations of the security forces.

The Secretary of State for Northern Ireland (Mr. Roy Mason): Public relations for the Army are handled by Army information services at Headquarters Northern Ireland and are the responsibility of my right hon. Friend the Secretary of State for Defence. Public relations for the RUC are a matter for the Chief Constable. I know that he attaches great importance to this work, and the force is engaged in an extensive programme with a view to increasing public support for the maintenance of law and order.

Mr. Biggs-Davison: Is the Secretary of State aware that the Opposition applaud the fillip that the right hon. Gentleman has personally given to the Ulster Defence Regiment at a time when it has been bearing terrible casualties, coincident with vile slanders from certain politicians? Should not all who hold or aspire to

responsibility in Northern Ireland back the security forces and encourage recruitment from across the community instead of exaggerating the faults of a few?

Mr. Mason: I am much obliged for what the hon. Gentleman has said. It is tragic that in recent months the UDR has been coming under attack, especially in off-duty hours. This is the most callous and most discriminate form of killing that the Provisional IRA in particular has embarked upon in recent weeks. It is up to us all, on both sides of the House and on both sides of the sectarian divide in Northern Ireland, to give the UDR all the support and recognition it requires.

Mr. Powell: Will the right hon. Gentleman, in conjunction with his right hon. Friend the Secretary of State for Defence, urgently correct the unfortunate false report in the Press in Northern Ireland which attributed offences committed on duty to members of the UDR—a most damaging and false statement?

Mr. Mason: I am obliged to the right hon. Gentleman for raising that matter. It should be quickly rectified. I felt some sympathy for the operations of the UDR in recent weeks and I went out on patrol with its members one night in order to give them some recognition of the difficult task they are having to perform. There are thousands of members now. Though, occasionally, one may slip through the screening process, by far the majority are good, honest men, who are doing their best for the security of Northern Ireland.

Rear-Admiral Morgan-Giles: On the subject of publicising the names of individual officers and men who render safe bombs and explosives in Northern Ireland, did the Secretary of State for Defence discuss this with the right hon. Gentleman, as he promised me he would? If so, what was decided?

Mr. Mason: From my previous responsibility, I am aware of the difficulties here as, I am sure, is the hon. and gallant Gentleman. It would be difficult quickly to name those members, especially of the ATO force, which is responsible for bomb disposal, even when they get gallantry awards, because of the risk of those names being listed and earmarked for assassination in Northern Ireland.

Mr. Carson: Is the Secretary of State aware that certain members of the SDLP have made a vicious and wicked propaganda campaign against the UDR? Will he agree that a good Government public relations exercise is essential to counteract such statements? Is the Secretary of of State also aware that political maggots, namely Canavan, Mallon and Cooper, are responsible for the deaths of UDR men in Northern Ireland?

Mr. Mason: Public information and propaganda are extremely important in Northern Ireland, as the hon. Gentleman will recognise. Very often, of course, the propaganda war takes higher priority than some of the killings that take place there. But I hope that the hon. Member will not start chastising members of political parties on that score. He will recognise, I am sure, that in the Press on Monday my hon. Friend the Member for Belfast. West (Mr. Fitt), very courageously, viciously attacked the Provisional IRA for its killings against its own Catholic people in Northern Ireland.

Mr. Fitt: Will my right hon. Friend deprecate the outlandish and slanderous language that has just been used by the hon. Member for Belfast, North (Mr. Carson), in which he sought to lay the blame and the responsibility for the deaths of the UDR men on the shoulders of the SDLP? Does my right hon. Friend agree that the full responsibility for those deaths can be laid at the feet of the Provisional IRA, and that every member of the SDLP, including those mentioned by the hon. Member for Belfast, North, has openly condemned the IRA for every one of those killings? Does my right hon. Friend also agree—this is most important—that over a number of years certain factions, namely the UVF and other Loyalist para-military organisations, have been able to infiltrate the UDR, bringing no praise on that regiment?

Mr. Mason: I would not want to start, in this House, an argument along the political front and the sectarian divide in Northern Ireland. Suffice it for me to say that the Provisional IRA has itself been responsible for many bombings, assassinations and, I believe, sectarian killings. But I believe that the UVF assassination squads are equally guilty. Most of the senior and responsible

politicians in Northern Ireland, however, are keeping well away from both of them.

Mr. Speaker: I allowed longer on that Question than will be possible for others.

Mr. Goodhart: asked the Secretary of State for Northern Ireland if he will make a statement about the security situation.

Mr. Mason: The main features of the security situation since last reported to the House have been some particularly brutal sectarian murders, a number of attacks on the security forces, a high success rate in bringing the gunmen and criminals to justice, and the further decline in popular support for the Provisional IRA.
The fact that already this year a total of 1,183 people have been charged with terrorist crimes, including 116 with murder and 103 with attempted murder, is a measure of the inroads now being made into the ranks of the terrorists. In the same period, 119 people have been murdered as a result of sectarian and inter-factional assassination.

Mr. Goodhart: I welcome the robust tribute that the Secretary of State paid earlier to the Ulster Defence Regiment, but does he recall that his predecessor told us on 2nd July that there would be a substantial increase in the full-time element of the regiment? Can he now tell us how many new full-time UDR men are being recruited?

Mr. Mason: No. I am sorry, but I cannot oblige the hon. Gentleman and the House at this moment. The increase of "conrates"—that is, the full-time UDR—is certainly under urgent consideration, and I hope that when I ask the House for the renewal of the emergency provisions I shall be able to say something useful.

Mr. Powell: When the right hon. Gentleman use the word "sectarian" in the technical and specialised sense in which we in this House understand that he is using it in that kind of answer, will he make clear to the general public that there is no question of great masses of people in Northern Ireland, whose religions differ, being hostile to one another or clashing with one another, but that both lie under the terror of a small


number of gunmen and that of the two religious communities, the Roman Catholics suffer more from the terror?

Mr. Mason: I am afraid the right hon. Gentleman is correct. I concur with what he says. There are a few gangsters—callous murderers—in the ranks of the UVF, the UFF and the Provisional IRA who are responsible for these sectarian killings. The vast majority of Northern Ireland people are not involved and do not have that hatred and emnity for each other.
Furthermore, I notice that in Great Britain, as the Northern Irelanders would term it—namely, England, Scotland and Wales—we are boasting that we have got rid of the "English disease" and that we have the best industrial record of the past 25 years. In industry in Northern Ireland it is twice as good as that. To the workers themselves when they cross the threshold of their factory gates there is no sectarian divide.

Ms. Colquhoun: Will my right hon. Friend accept that the Government's policies in Northern Ireland have failed abysmally and that they fail every day that people hear on the news that someone has been murdered or is in trouble? Will he not seek help from the United Nations in solving the problems of Northern Ireland? Is he aware that as long as he keeps British troops in Northern Ireland there will be no solving the problems there, and that he may as well admit it sooner rather than later and not allow the situation constantly to deteriorate as he, the Government and the appalling consensus in this British House of Commons do at present?

Mr. Mason: I am sorry, but I absolutely and fundamentally disagree with my hon. Friends analysis of the Northern Ireland situation. Now that we have ended detention, every assassin who is caught and charged for murder, attempted murder or the handling of explosives is going behind bars. He is going into gaol and being taken out of society for a long time. I have given the figures this afternoon to prove that this policy is working.
The RUC is now more effective, morale is high, recruiting is good, and the regional crime squads are really tackling the assassins. The Provisional IRA knows this, and so do the UVF and the

UFF, and they are now struggling to find propaganda weapons against Her Majesty's Government. One of the problems is, of course, that they are now trying to operate with sniping tactics against the UDR when they are off duty, and the RUC and other security forces when they are on patrol. This is a British Government responsibility, and not one for the United Nations.

Arms, Ammunition and Explosives

Mr. Gow: asked the Secretary of State for Northern Ireland what evidence he has about the source of arms, ammunition and explosives which arrive in the Province unlawfully; and if he will make a statement.

The Under-Secretary of State for Northern Ireland (Mr. James A. Dunn): It would not be in the interests of security to reveal the full nature of evidence available to us. I can, however, say that we have reason to believe that the flow of arms across the Atlantic has been reduced. As for weapons of East European origin, there is no evidence to suggest that terrorists obtain more than a small proportion of their weapons from that source.
As regards explosives arriving unlawfully in Northern Ireland, our belief that most of the commercial explosive recovered originates in the South is, I think, well known. The origin of improvised explosive cannot be established with certainty. The Irish Government, with whom we are in regular contact, share our concern to prevent supplies of explosive material reaching the hands of illegal holders.

Mr. Gow: As the story of violence and terror continues unabated in Northern Ireland, will the Minister confirm that the Government are taking all the diplomatic steps open to them to impress upon foreign Governments that the supply of money as well as of arms and ammunition, although illegal, is causing increasing concern to Her Majesty's Government?

Mr. Dunn: I can give the assurance that the hon. Gentleman seeks. We are seeking in every avenue to discuss these matters in great detail with those countries which may be able to help us.

Mr. Kilfedder: Is it true that since the emergence of the Peace People movement and their trips abroad there seems to be


a greater awareness and understanding of the threat to decent people in Northern Ireland as a result of money and arms being sent from abroad to the Provisional IRA in Northern Ireland? Has the Minister any evidence to show that there is a drying-up as a result of this, and can the Government help further to stop up the sources?

Mr. Dunn: I think that what the peace movement has been able to achieve is of great significance to Northern Ireland. I have no evidence to suggest that through the work that it has performed and the opportunities that it has given in the Province it has been instrumental in stopping the flow of arms. I wish to goodness that I could say that it had.

Rev. Ian Paisley: What proportion of explosions recently have taken place as a result of the laying of commercial gelignite, and what proportion through improvised explosives? What steps is the Minister taking to try to seal the border against the import of such explosives?

Mr. Dunn: On the first two questions that the hon. Gentleman asked, I cannot give him the statistical evidence that he is seeking. With regard to the border, every effort is being made to police what crossings remain open and we are keeping a careful watch with vehicle checkpoints and patrols. More than this we cannot do at the moment.

Mr. Freud: Would the Minister consider using the public relations department in the United States to impress upon the people of the United States the total lack of glamour which is inherent in providing aid to Northern Ireland, or Ireland as a whole, because, at this moment—especially with regard to what Mr. President-elect Carter has announced—there are still appeals for money which people think will do good, rather than the incredible harm that it does?

Mr. Dunn: I am pleased to tell the House and the hon. Gentleman that we have received good co-operation from the United States as well as from Canada and North America.

Electoral Law

Mr. Molyneaux: asked the Secretary of State for Northern Ireland what changes

he intends to make in the electoral law in Northern Ireland.

Mr. Mason: An Order in Council will shortly be presented to make provision for the 1977 and subsequent local government elections. It will provide for them to be conducted under the same system of proportional representation as was used in 1973, but for restricted postal voting on the same criteria as apply to local elections in England and Wales. The Order will also make provision for the same limits on candidates' expenses as apply in local government elections in England and Wales. The right of candidates to send election addresses post-free, which they enjoyed in 1973, will be retained.

Mr. Molyneaux: Is the Secretary of State aware of the need for early clarification of all the rules and regulations concerning the local government elections? Is he aware that we on the United Ulster Unionist Bench fully support the restriction on postal voting and that we agree that it should be restricted to those categories named in the Representation of the People Act? Will he ensure that the limitation of candidates' expenses is imposed on an individual basis and not upon groups of candidates?

Mr. Mason: I shall give consideration to what the hon. Gentleman says about getting out more information. I may be able to make a lengthier statement for the Press so that people in Northern Ireland can understand the changes that are taking place regarding the future local government elections. Candidates' expenses were £300 in the last election. Under the new system, they will be increased, and joint candidates' expenses will be improved, too.

Mr. Marten: On the wider question of election, what initiative is the Secretary of State taking to increase the Northern Ireland representation in this House?

Mr. Mason: My priority would be to encourage the politicians in Northern Ireland to go for a devolved Government first.

Mr. Kilfedder: Will the right hon. Gentleman change the electoral law to ensure that, irrespective of what happens in Great Britain, there will be no delay in having direct elections to the Common


Market by making the Province a single constituency which returns three or four Members to the EEC Parliament? This would provide greater democracy in the Province than now exists.

Mr. Mason: That is an entirely different question from the one on the Order Paper. Perhaps we should wait until the Bill on this subject has been published.

Rev. Ian Paisley: Will the right hon. Gentleman enlarge on his remarks about fuller representation in this House? Does he not think that it would be fairer if, when proposals for devolved government for Northern Ireland are being discussed in this House, the Northern Ireland people had proper numerical representation in the House?

Mr. Mason: Since I came into this office I have always recognised—and I have said it more than once—that Northern Ireland is under-represented in the House of Commons. At present, if representation for Northern Ireland were equated to the division of electorates in the rest of the country, Northern Ireland would be entitled to at least four more seats, but I do not think that it is either appropriate or the most opportune time to go into the question of increased parliamentary representation. I hope that the politicians in Northern Ireland in particular will start thinking seriously about how best they can agree upon a devolved form of government. We may then be able to settle the question of parliamentary representation in the House of Commons.

Mr. Fitt: In a speech by my right hon. Friend in Northern Ireland recently, he called upon local politicians in Northern Ireland to try to get together to find out whether there is a basis for the formation of a devolved Government. Does he not think that the time is now opportune to use the agencies of his office to determine whether it would be possible to call a conference of elected representatives in Northern Ireland, with the intention of bringing about devolved institutions there? Those who attended would then be seen as seeking a solution to the problem; those who refused to go, except on their own terms, would be seen

for the destructive sector which they now are.

Mr. Mason: In view of what my hon. Friend said in the latter part of his supplementary question, I do not know whether it would be helpful. He wanted really to highlight those who had been obstructive rather than those who wanted to be helpful. I am always willing to listen to suggestions. As the Convention failed, I would have thought that the local politicians themselves should be prepared to consider the reasons why the Convention did not succeed and why we could not have moved on to a form of devolved government in which we could have achieved acquiescence by the major sections of the community in Northern Ireland. If they can do that, I am prepared to listen.

Compensation Legislation

Mr. Townsend: asked the Secretary of State for Northern Ireland if he will publish the completed reviews of the present legislation on persons and property compensation, and bring legislation before the House by the end of 1976.

The Minister of State, Northern Ireland Office (Mr. J. D. Concannon): No, Sir. My right hon. Friend will inform the House of his intentions as soon as he is ready to do so.

Mr. Townsend: Does the Minister appreciate that soldiers who have served and who are serving in Northern Ireland rightly regard the present shilly-shallying over these complicated matters by Whitehall as unforgivable? Secondly, will the Minister at least promise the House that in future those convicted of acts of terrorism will not be entitled to free hand-outs at the taxpayers' expense? Finally, does the Minister appreciate that crippled soldiers are waiting years for compensation? What will he do about it?

Mr. Concannon: On the accusation of shilly-shallying, as the hon. Gentleman said, these matters are complicated. They certainly are not easy. I know what I should like to see out of this, but all I can say to the hon. Gentleman is that he must be patient a little longer. We intend to put this right as soon as we possibly can.

Mr. McCusker: Is the hon. Gentleman aware of the grave disquiet that there is that this has not been brought forward sooner? Is he aware, for example, that a young woman who was left widowed with two young children as a result of the Bessbrook killing less than a year ago received compensation of less than £5,000 for herself and her two young children, and that this is hard to reconcile with the £11,000 and £16,000 paid out to living terrorists?

Mr. Concannon: On the last point, I should say that this has nothing to do with the two pieces of legislation that will be coming before the House. This is something that happened in 1971 and is among the last of these incidents. Sometimes I wonder why the other 12 were not so furiously followed in this argument.

Drainage Works

Mr. Powell: asked the Secretary of State for Northern Ireland what further consideration he has given to the publication of a phased provisional programme for future drainage works which are in contemplation.

Mr. Dunn: This suggestion has been given consideration, as my right hon. Friend the then Secretary of State for Northern Ireland promised on 1st July 1976. Provisional proposals can be misinterpreted to mean actual commitments, and my view is that the disadvantages of publishing even a provisional plan for the drainage of Northern Ireland would outweigh the advantages.

Mr. Powell: Is the hon. Member aware that while I recognise the close interest which he personally has taken in this matter—including my own constituency— I shall continue to press him to find a method of indicating to those interested, particularly in agriculture, broadly what are the prospects and intentions during the coming years, and to persuade him that this will be advantageous to the Government and to representatives of Northern Ireland as a matter of public relations and public opinion?

Mr. Dunn: As the right hon. Gentleman has recognised, and as I have said many times, I am more than willing to see hon. Members concerned with drainage problems in their constituency or, indeed, the organisations already existing

in Northern Ireland, such as the Farmers' Union. However, one of the disadvantages would be that any provisional proposals would automatically cause controversy in the order of priorities and the times spent in undertaking surveys, because the representations made by deputations would really stop the drainage programme as we now know it.

Mr. Wm. Ross: Is the Minister aware of the great problems which arise as the result of minor watercourses and which can be successfully tackled only by Government action? Will he give an undertaking that the programme on the minor watercourses will not only be continued, but will, in fact, be expanded?

Mr. Dunn: I give the hon. Gentleman the assurance that we shall continue wherever possible to deal with minor watercourses. However, that in itself causes problems, because those riparians on either side of the watercourses often hold negotiations to a point where serious delay is involved. If I were to follow absolutely what the hon. Gentleman has requested, criticism would fall upon me for inaction.

Housing Policy

Mr. Fitt: asked the Secretary of State for Northern Ireland if he will make a statement on future housing policy in Northern Ireland.

The Under-Secretary of State for Northern Ireland (Mr. Ray Carter): I have been reviewing, in the light of the latest forecasts about population changes, housing conditions and the new powers in the Housing (Northern Ireland) Order 1976, how more effective action can be taken to tackle Northern Ireland's grave housing problems. The new building programme for the next five years is being re-examined and is likely to show lower targets for many districts.
I am determined that measures to deal with the housing crisis in Belfast should be given a much higher priority. I believe that substantial new programmes for renewal and improvement in the inner city are needed and am examining how our machinery for dealing with the housing and associated problems in Belfast can be strengthened. I have also been studying the severe handicap which sectarianism imposes in making greater progress


in many areas. I plan over the coming months to open up a wide public debate which will involve all those interested in housing, including the political parties.

Mr. Fitt: My hon. Friend will recognise that his statement indicates that there is to be a departure from previously recognised housing policy in Northern Ireland. In implementing his new policy, will the Secretary of State bear in mind at all times that this is not only a question of bricks and mortar, finance and economy, that housing is a very human problem in Northern Ireland, and that no person should be forced to live in any part of Northern Ireland against his wishes, particularly in view of the sectarian problems that exist there at present?

Mr. Carter: I can give my hon. Friend that assurance. We seek to do everything in this area in a purely voluntary way, but the one thing that we must do is to make an impact on the Belfast housing problem. It is certainly the worst in the United Kingdom—and probably the worst in Western Europe.

Mr. Molyneaux: Is the Minister aware that we on the United Ulster Unionist Bench fully support his general intention to switch resources to the restoration of existing housing stock in preference to development of vast new housing estates? Regarding the consultation to which he referred, will the Minister give an assurance that he will give priority to the elected representatives, namely, the local district councils, in preference to all others—certainly in preference to self-appointed community groups?

Mr. Carter: It is certainly my intention to consult everybody, but particularly the elected representatives, including Members of Parliament and councillors But in this change of direction we hope to carry everybody with us—the Housing Executive, the local authorities and reputable tenant and resident associations.

Mr. Watkinson: Is my hon. Friend satisfied with the level of cost of public housing in Northern Ireland? Will he comment on allegations that there may have been excessive profiteering at public expense?

Mr. Carter: Investigations are continuing in that area and allegations are con-

tinually being made, but if my hon. Friend has evidence of any malpractice, or believed malpractice, and will pass it to me I shall be only too pleased to look into it.

Terrorism

Mr. Pardoe: asked the Secretary of State for Northern Ireland how many violent deaths there have been in Northern Ireland to date in the current year; and in how many of these the persons responsible have been brought to trial.

Mr. Mason: So far this year there have been 285 deaths attributable to the security situation in Northern Ireland, and 91 persons have so far been charged in respect of 49 of these.

Mr. Pardoe: Does the Minister recognise that the first part of his answer gives a totally appalling figure, and that it shows that there has been no improvement in the security situation in all the time that British troops have been in Northern Ireland? Does he not recognise that there is a limit to how far this country can go on pursuing a policy that gives no hope of success?

Mr. Powell: Which country?

Mr. Mason: I would point out to the hon. Gentleman that of the 285 deaths, 119 were sectarian and interfactional killings, which are not the responsibility of the security forces. These deaths were caused by Irish people themselves killing their own kinfolk, crossing the sectarian divide for sectarian reasons. The security forces have great difficulty in trying to control that sort of situation. I hope that the hon. Gentleman is not giving hope, succour and aid to the "Troops Out" movement, when he utters those sorts of words in the Chamber.

Mr. Flannery: Does my right hon. Friend agree with me that the number of killings in Northern Ireland over a period is not entirely due to the stability, or lack of it, in the security situation, but is due to the political situation in Northern Ireland? Does my right hon. Friend agree that the fact that these deaths continue on an ever-increasing scale seems to indicate that our political line on this situation at least needs further and deeper exploration? Will my right hon. Friend therefore take into account that some type of conference must be called at some


stage, involving all the groupings involved, in order to establish a new political alignment and prevent these deaths, no matter what the security situation happens to be at that moment?

Mr. Mason: I think that there is some substance in what my hon. Friend says about the importance of the social problem in Northern Ireland—with so many people out of work, the school leaver problem and young people not being able to find a job and therefore being fodder for para-military organisations. There is a major social problem, and it is my intention, while I am responsible for governing the Province, to bring the economic and social problems to the fore, to force the politicians and the unions to spend more time on them, and to try to tackle, partly in that way, the security problem that is inherent in Northern Ireland.

Mr. Neave: Is the Secretary of State aware that the withdrawal of the British Army at the present time would lead to a far more terrible situation than exists today? Will he make his position clear on that once again? We will give him our full support, as we have done in the past. Is it not true that the level of violence in Northern Ireland is intolerable, and that it will not be stopped until the Secretary of State is able to take steps to put out of circulation for a long time the people who are organising it? Will he, in particular, say what steps he is taking to deal with the high level of juvenile crime, which is causing very great concern to the Royal Ulster Constabulary and others at the present time?

Mr. Mason: I am obliged to the hon. Gentleman for what he says. The Army, which now numbers 14,500 in Northern Ireland, will stay there as long as the security situation warrants it.
The RUC has already charged 116 terrorists with murder this year. Gradually, it is taking out of society the murderers, the assassins and the major criminals who are operating in Northern Ireland, and putting them behind bars for a long time without any political status.
With reference to the "Troops Out" movement, I think that any responsible commentator on the Irish scene would be very hesitant to put forward the theory that peace could be quickly restored if

the Army were withdrawn. Most people would recognise that the result might be a bloodbath in Northern Ireland, spilling over to major cities in Great Britain as well.

Terrorism (Compensation)

Sir Nigel Fisher: asked the Secretary of State for Northern Ireland if he will introduce legislation to ensure that public funds are not made available for compensation to terrorists or those closely associated with terrorists or with violent or illegal organisations.

Mr. Concannon: I must ask the hon. Member to await the detailed proposals for amending generally the law on compensation for criminal injuries to persons in Northern Ireland, which my right hon. Friend hopes to publish as soon as possible.

Sir N. Fisher: Does the hon. Gentleman agree that there is much public disquiet about awards made to suspected terrorists? At least two recent cases have shown the need to give the courts geater discretion in assessing the extent to which payments are involved with terrorist organisations.

Mr. Concannon: Under the present law, the courts have such discretion now. But it is, and has been, a very complicated affair. We have had reports on both criminal personal injuries and property injuries, and we are acting as speedily as we can.
If the hon. Gentleman and others will show a little more patience for a little longer, I am sure that they will be satisfied.

Mr. Nelson: Does the Minister agree that the basis of assessment of compensation under the Criminal Injuries to Persons (Compensation) (Northern Ireland) Act is grossly unfair, not only to terrorists but to the widows of British soldiers killed in the Province? Will he please ensure that in any future legislation on this subject less account is taken of the pure financial loss to the victims and their families, and that the very large differences that exist under the present legislation will no longer be tolerated?

Mr. Concannon: The hon. Gentleman and his hon. Friends will have to wait a little longer. It is a very complicated


affair, as is obvious from the way that the hon. Member started his question, when he said that the system is unfair to terrorists as well as to soldiers and others. We have to be very careful what we do in this respect, so that in cutting out one we do not cut out all the others.

Mr. Neave: Is the Minister of State aware that the Chairman of the Criminal Injuries Compensation Board in Britain, Mr. Ogden, has stated that in future he will make no awards to persons convicted of terrorist activities? Is not this the legislation which should be amended to bring Northern Ireland into line with that principle? Does the Minister agree that compensation awards should be made on the same basis throughout the United Kingdom?

Mr. Concannon: Again, I can go no further. I am aware of Mr. Ogden's statement, with which I, personally, concur, but I still ask the hon. Gentleman to wait a little longer, until the proposals have been prepared.

Primary Education

Mr. Wm. Ross: asked the Secretary of State for Northern Ireland if he will define the term nearest suitable school with regard to primary school education in Northern Ireland.

Mr. Carter: The "nearest suitable school" is not a term defined in the education statutes. However, in a Northern Ireland Department of Education circular of 8th August 1969 on school transport the "nearest appropriate school" is the one nearest to the home of the pupil which is educationally apropriate to the pupil's age, aptitudes and abilities.

Mr. Ross: Is the Under-Secretary aware that the education boards are taking the nearest suitable school to mean the school which is suitable on religious grounds? Is he aware that some Roman Catholic parents who believe that separate education has contributed to the present division in Northern Ireland wish to send their children to State schools but are being refused transport for those children to the nearest State school because a church school is within the statutory walking distance? Will the hon. Gentleman undertake to see that all children in Northern Ireland, if their parents so wish, have the right to attend

a State school and be provided with transport to it?

Mr. Carter: My noble Friend is aware of the problems that the hon. Member raises. The hon. Member has instanced a particular case in his own constituency which my noble Friend is looking into while at the same time considering the general point involved.

Criminal Jurisdiction Act 1975

Rev. Ian Paisley: asked the Secretary of State for Northern Ireland if he will make a statement on the working of the Criminal Jurisdiction Act 1975.

Mr. Mason: The Criminal Jurisdiction Act 1975 and its counterpart in the Republic of Ireland, the Criminal Law (Jurisdiction) Act 1976, have been in operation since 1st June 1976. The Acts relate only to persons arrested in connection with offences committed after that date. No prosecutions have yet been brought.

Rev. Ian Paisley: Can the Secretary of State inform the House how many members of terrorist organisations who committed crimes after that date and who should be subject to this law are at present in sanctuary in the Republic? What steps is he taking to see that the Act is now implemented?

Mr. Mason: The Act is in operation. I am sorry to say that there has not been sufficient evidence against anybody who has been apprehended since 1st June in the Republic whereby they could have been dealt with under the Act. Prior to 1st June, and therefore not coming under the recent legislation, 59 persons who were in the Republic were wanted for interview by the RUC.

Afforestation

>Mr. Joseph Dean: asked the Secretary of State for Northern Ireland what is the area of land that has been afforested in Northern Ireland; and what is the annual output of home-grown timber.

Mr. Dunn: To date, the Department of Agriculture for Northern Ireland has acquired a total plantable area of 54,609 hectares, of which 49,218 hectares have been planted. Approximately 12,500 hectares of forestry are privately owned. Most of the plantations have not yet


reached maturity, so output of timber is restricted. Over the past five years an average of 55,000 cubic metres of timber have been produced annually, but this figure is expected to increase to around 400,000 cubic metres by the end of the century.

Mr. Dean: How many jobs have been provided in Northern Ireland through the processing of home-grown timber? What increase in this employment, if any, is expected in future? Do adequate facilities for training in forestry techniques exist in Northern Ireland?

Mr. Dunn: Approximately 600 persons are engaged in sawmilling, chipboard manufacture and the processing of homegrown timber. It is expected that by the end of the century, when plantations mature and timber output increases, about 4,000 jobs will be created. During the year ending March 1976 roughtly one-sixth of the Department of Agriculture's industrial labour force had specialist training.

Sir John Hall: Can the Minister say what attempt has been made to grow coppice timber in Northern Ireland, which is particularly suitable for that purpose, for use in the paper industry? It also has the advantage of being a much more frequently cropped timber than the usual slower-growing timber.

Mr. Dunn: I cannot answer that without notice because I am not an expert on forestry in Northern Ireland. However, I shall write to the hon. Gentleman.

POLITICAL HONOURS (SCRUTINY COMMITTEE)

Mr. Hurd: asked the Prime Minister if he will review the terms of reference of the Scrutiny Committee which examines proposals for political honours.

The Prime Minister (Mr. James Callaghan): I have at present no changes to propose in the terms of reference of the Political Honours Scrutiny Committee. It is customary for the Committee to be reconstituted on the appointment of a new Prime Minister. The following members of the Privy Council have kindly agreed to serve: Lord Shackleton (Chairman), Lord Carr of Hadley and Lord Franks.

Mr. Hurd: I thank the Prime Minister for that reply. In the case of life peerages, would these distinguished members of the Scrutiny Committee be able to inquire, in the nicest possible way, whether the person concerned was actually proposing to perform the duties that go with the honour? Is it not rather absurd that, whereas the voting strength of the Government in the other place has been about 90 lately, the right hon. Member for Huyton (Sir H. Wilson), alone and single handed, created 215 life peers?

The Prime Minister: It is not the responsibility of the Political Honours Scrutiny Committee to inquire whether those who are honoured in this way intend to attend regularly in another place, and indeed it should not be its responsibility. Its terms of reference are clearly laid out and do not embrace this matter. I am glad that the hon. Gentleman was not attacking the system of political honours, especially in view of the honour which he himself received in the resignation honours of the right hon. Member for Sidcup (Mr. Heath).

Mr. Biggs-Davison: Do the Prime Minister and his predecessor, the right hon. Member for Huyton (Sir H. Wilson), agree with their predecessor Lord Melbourne, who said
I like the Garter; there is no damned merit in it"?

The Prime Minister: There is a certain amount of truth in that, and I would not want to disagree with it. I am reminded of the Conservative Prime Minister, Mr. Disraeli—Lord Beaconsfield —who, I am told, when asked whether he could give someone an ivory pass to go through Horse Guards, said "No. You may have a dukedom but not an ivory pass."

Mr. David Steel: While the Prime Minister will no doubt agree that the honours system has been abused in the past, will he also accept that it would be wrong to exclude from the honours list people who have given voluntary service—or, in some cases, professional service—to politics, and therefore to the maintenance of our democracy, while other people who support other worthy causes are automatically included?

The Prime Minister: Yes. I know that the hon. Gentleman's party has an


interesting history on the matter of the abuse of political honours. As far as I am concerned, to judge from my correspondence from both sides of the House, the conferment of honours is something which gives a great deal of innocent pleasure and is felt to be a satisfying reward by many people who give a lot of voluntary service.

HONG KONG

Mr. Mike Thomas: asked the Prime Minister if he will pay an official visit to Hong Kong.

The Prime Minister: I have at present no plans to do so.

Mr. Thomas: Does my right hon. Friend agree that we still need to make progress in improving wages and labour conditions and in rooting out corrupt practices in both private and public organisations in Hong Kong? Will he take up the plans that he had as Foreign Secretary to visit the colony? Does he still hold the view that Britain has serious responsibilities towards Hong Kong, which we must do better at fulfilling, or does he agree with my hon. Friend the Member for Ilkeston (Mr. Fletcher) that the best course for Britain is for us to become a colony of Hong Kong?

The Prime Minister: I know my hon. Friend's interest in Hong Kong since his visit. That was intended as a compliment, if I may say so, and I want to congratulate him on the assiduity with which he follows up these matters. Indeed, if I may be quite serious, it is one of the advantages of hon. Members visiting such territories that there is a continuing interest that often lasts through the lifetime of a Member's membership of this House.
On the social and labour conditions in Hong Kong, I am told that the target is to achieve a level of legislation in social, labour and allied fields at least broadly equivalent to the best in neighbouring countries within the next five years. I am glad to inform the House that the Hong Kong Government intend to improve their legislation significantly this year in respect of five outstanding ILO conventions, and next year in respect of a further four conventions. I asked for the previous figures, and I am told that, in the previous three years, they had ratified only five conven-

tions. I think, therefore, that the interest that my hon. Friend is taking—which I also took when I was Foreign Secretary —is bearing fruit.

Sir Frederic Bennett: Meanwhile, would the Prime Minister care to put into perspective the relative average standard of living in Hong Kong as compared with the whole of the rest of Asia, with the possible exception of Singapore?

The Prime Minister: I would if I were given notice of the question, but I do not carry all those figures in my head.

NEDC, CBI AND TUC

Mr. Radice: asked the Prime Minister when he next intends to take the chair at the NEDC.

The Prime Minister: I refer my hon. Friend to the reply which my right hon. Friend the Lord President of the Council gave on my behalf to the hon. Member for Surrey, North-West (Mr. Grylls) on 30th November.

Mr. Radice: Does my right hon. Friend agree that in the very difficult economic decisions facing the Government the problem is how to restore confidence in sterling and to ensure a steady reduction in the public sector borrowing requirement without at the same time deflating further an already deflated economy? Would he also accept, however, that, whatever the difficulties of the decision, it is vital for this country that the right balance be struck?

The Prime Minister: My hon. Friend has stated in a most pithy form the problem that confronts not only the Government but the country—how to ensure as he properly says, that there is confidence overseas among holders of sterling without, at the same time, the country being driven into a downward spiral. That is a problem engaging the attention not only of the Cabinet but of many others, and I hope that we shall come up with the right solution as between those two elements.

Mr. Nicholas Winterton: How does the Prime Minister equate his encouragement to industry to invest with the fact that he is about to load upon industry an additional £1,000 million of payroll tax


and when the minimum lending rate stands at a record level?

The Prime Minister: The hon. Gentleman is giving only a partial account of the liquidity and taxation position of industry. As I pointed out in my rather long, and perhaps, boring speech in reply to the Queen's Speech last Wednesday— [HON. MEMBERS: "NO."]—I thank the House. I paused slightly, hoping for that. I pointed out that there were many ways in which the Government had actively assisted liquidity and profitability in relation to the company sector, and it is our desire to continue to do so and it is clearly a great advantage to it that, in the present year, very few companies will be paying mainstream corporation tax. But that does not mean that that sector can be totally exempt from burdens. I know that the hon. Gentleman appreciates that.

Mr. Atkinson: Does not my right hon. Friend agree that there is no solution ahead for our massive unemployment situation in the absence of a substantial reduction in the working week? If that is the case, would my right hon. Friend give the House an assurance that, whatever he is now discussing with our creditors overseas, nothing will be said to prevent the steady reduction of the working week so that we can bring about job creation of the kind now demanded in our industry?

The Prime Minister: The problem of unemployment is clearly affected both by the recession in world trade, which has not yet been overcome, and by our own policies of trying to divert resources into exports and into investment first and restraining consumer demand. But I agree with my hon. Friend and believe—though not everyone accepts this—that there is a growing structural problem that affects not only this country but the whole of the Western world. When we are in the position, as I believe we shall be, that we are not asking for any additional support because we shall have a balance in our payments, that may well be the time when we shall have to turn to the kind of measures that my hon. Friend is suggesting, and other countries may find that they need to do the same.

Mrs. Thatcher: May I return to the question asked by my hon. Friend the Member for Macclesfield (Mr. Winter-

ton)? Would not the Prime Minister agree that recent levels of public expenditure have been an important reason for our poor industrial performance? If that is so, when does he propose to take steps to reduce them?

The Prime Minister: No, Sir, I do not think that the two have any relationship at all. The reason that companies do not invest are many and manifold, as was discovered by the right hon. Lady's predecessor when he made his famous lament to the Institute of Directors three or four years ago. I believe that the reasons go far beyond the level of the public sector borrowing requirement. I know that it is something on which attention is focused at the present time, but we seem to have a habit of singling out one item from our national economy and focusing on that to the exclusion of everything else. There are many elements which affect it.

Mrs. Thatcher: But if the Prime Minister does not agree that there is any relation between the two, his Chief Secretary certainly does. I took some of the words from a speech he delivered last Friday which indicated that the Chief Secretary thought that the levels of public expenditure were an important reason for poor industrial performance. I thought, too, that the Prime Minister believed that industry should have absolute priority. Does he now go back on that too?

The Prime Minister: The right hon. Lady should not try to put words either into my mouth or into the Chief Secretary's. These quotations extracted from speeches must be looked at against their background. I feel that strongly because I sympathised so much with the right hon. Lady when the accent was drawn on the difference between, as I understand it, "I will never speak to the right hon. Member for Sidcup (Mr. Heath) again," and, "I will not speak to that man ever again." Of course there is a distinction when one considers these quotations. [Interruption.] I was just trying to get some counsel from my right hon. Friend the Leader of the House, who so devastated the right hon. Lady on Monday night. He tells me that I have nearly got the quotation right, just as the right hon. Lady nearly got the quotation right.
As for the general position on these matters, there is no doubt that the public


sector borrowing requirement is one of the factors. It is also the case that we are giving major aid to our industrial strategy. That comes first and will continue to do so.

Mr. Pardoe: Has the Prime Minister seen the comments of the Director-General of NEDO, following his report on the nationalised industries, to the effect that he knew that the way we run the industries was pretty bad, but that he had not realised that it was that bad? Does not the Prime Minister think that we ought to do something to improve the way in which we run our existing nationalised industries before we take on more?

The Prime Minister: No, Sir. I do not think that the last part of the hon. Gentleman's question applies, although it is true that we need constantly to be improving the performance of all our industry, not just the nationalised industries, but private industry as well. That is the Government's policy.

Miss Joan Lestor: I agree with much of what my right hon. Friend has said, but would he not agree that one of the biggest charges on public expenditure today is unemployment benefit? Will he say what he is doing to ensure that investment takes place in labour-intensive industries rather than in capital-intensive industries in order to deal with unemployment? Investment and employment are not necessarily related.

The Prime Minister: There is no specific Government preference for labour-intensive industries as opposed to capital-intensive industries, although I agree with my hon. Friend—this is the burden of the previous question—that investment in capital-intensive industries does not necessarily produce more jobs. This is one of the problems that we have to face. Of course an increase in unemployment affects the public sector borrowing requirement and that is why we need both to overcome inflation and to get back to steady and sustainable growth.

STRANGERS (HOUSE OF COMMONS FACILITIES)

Mr. Speaker: I have a brief statement to make.
On 29th July, the hon. Member for Keighley (Mr. Cryer) referred in a point

of order to the access of Strangers to certain facilities of the House and asked in particular to what extent representatives of a public relations firm could use telephones or have access to the Terrace and the Strangers' Bar. He gave instances of what he regarded as abuse of Strangers' rights.
This problem has since been considered by the Services Committee, and I have accepted its advice. I am satisfied that no changes are required in the rules regarding the access of Strangers to the Terrace and so on. There is, however, a growing problem of non-compliance with these rules, and the facts mentioned by the hon. Member for Keighley may have been examples of this.
The Serjeant at Arms is, therefore, reminding all concerned of the rules and is taking steps to secure their enforcement. These measures include tighter control over the use by Strangers of the Terrace and Bar and a clearer identification of telephones which are only for the use of Members and the police.
Whilst I am sure that the House will welcome these measures, a responsibility still rests on Members to ensure that their guests do not abuse their privileges; for example, by approaching and seeking to lobby other Members on the Terrace, and by entering the Strangers' Bar in more than the authorised numbers. I have therefore authorised the Serjeant at Arms to prepare a summary of the rules for the guidance of hon. Members, and trust that the problems of last summer will not be repeated.

BUSINESS OF THE HOUSE

Mrs. Thatcher: Mrs. Thatcher: May I ask the Leader of the House to state the business for next week?

The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): Yes, Sir. The business for next week will be as follows:

MONDAY 6TH DECEMBER—Second Reading of the National Insurance Surcharge Bill.

Motion on EEC Document on water—R/2098/75.

TUESDAY 7TH DECEMBER—Committee stage of the Aircraft and Shipbuilding


Industries Bill, which will be taken formally, followed by motions on suggested amendments to the Bill and Third Reading.

WEDNESDAY 8TH DECEMBER—Remaining stages of the National Insurance Surcharge Bill.

THURSDAY 9TH DECEMBER—Supply [1st Allotted Day]: debate on a motion to take note of the First to Sixth Reports in Session 1975–76 of the Committee of Public Accounts and the related departmental replies.

Motions on Northern Ireland Orders on Appropriation (No. 3) and Supplementary Benefits (Amendment).

FRIDAY 10TH DECEMBER—Remaining stages of the Fishery Limits Bill.

MONDAY 13TH DECEMBER—Progress on the Second Reading of the Scotland and Wales Bill.

Mrs. Thatcher: Is the Lord President not aware that we think it an absolute disgrace to arrange for all the remaining stages of a big Bill, such as the National Insurance Surcharge Bill, within two days of Second Reading? This is a taxation measure which imposes nearly £1,000 million of taxation on our citizens and may affect many of them in other ways. The right hon. Gentleman is trying to railroad the measure through before they can know about it, before they know how it can affect them, or before they have any chance to make representations to Members whose job it is to scrutinise all taxation measures. Will he, therefore, take it off the list for Wednesday and allow a proper interval in which our citizens can make representations to their Members so that they may be properly represented?

Mr. Foot: I understand the right hon. Lady's representations on this subject. We looked at the matter and we are prepared to consider it afresh in the light of making a rearrangement of the business for next week—that is, proposing that the remaining stages should be taken on the Thursday rather than the Wednesday—but we cannot make any further suggestion than that for dealing with the situation. When hon. Members have had an opportunity of looking at the nature and scale of the Bill—I fully recognise that it is an important Bill—I think they

will agree that there will have been time for constituents to make representations. I am sorry to reply to the right hon. Lady that, beyond the arrangements that we have suggested, I cannot see how we can change this proposal.

Mrs. Thatcher: That just is not good enough. Three days are very little better than two for a taxation measure. The whole reason for our being here is to scrutinise taxation and to redress grievances. We must not impose measures without knowing exactly how they will affect our many constituents and organisations. There must be a respectable interval between Second Reading and remaining stages. It is a Money Bill I understand, Mr. Speaker, and therefore there is no possibility for revision in another place.

Mr. Foot: As I said to the right hon. Lady, I recognise the representations that she has made on the matter during previous discussions. We have looked at the possibility of rearranging the business for the following week in order to assist, but that also was not convenient to hon. Members opposite. Therefore, I fear that, in view of the discussions that we have already had, it will not be possible for us to make a fresh proposal for the business for next week.

Mr. David Steel: As the Leader of the House has announced that the Second Reading debate on devolution will begin on Monday, can he tell the House how many days he proposes to devote to it, because many Members obviously wish to participate? Secondly, in order to accommodate the differing views of his hon. Friends as well as the differing views in the Opposition, would he care to test the opinion of the House by a free vote on the matter?

Mr. Foot: On the second question, what is done by other parties is entirely a matter for them. The Government do not regard the matter as one that would be subject to a free vote. This, of course, is a major issue which has figured in the election manifestos of the Labour Party and one which has always figured in our programme as a major measure, so I cannot make any suggestion of that kind.
As for the length of the debate, we had thought that a three-day debate would be a perfectly reasonable period for the


discussion, but if representations for a longer period are made we shall certainly take them into consideration.

Mr. Spriggs: May I raise the same point that the right hon. Lady the Leader of the Opposition raised in relation to next Wednesday's business? Is my right hon. Friend aware that before this measure is dealt with many of his hon. Friends wish to have a look at it to see what the effect on unemployment will be in the country as a whole. On that ground alone, will he consider giving more time for consideration and discussion before the debate on Wednesday?

Mr. Foot: I apologise to my hon. Friend if I have mistaken what he said. I am not sure whether he was referring to the National Insurance Surcharge Bill or to the Social Security (Miscellaneous Provisions) Bill. If it were the former, the proposal has been before the country for a considerable time and there has been considerable opportunity for discussions to take place about it. Therefore, I think that what the Government are proposing is reasonable. We have to get the measure through, and I think that we shall have to proceed along the lines that we have suggested.

Mr. Powell: With regard to the Northern Ireland business on Thursday, may I ask the right hon. Gentleman two questions? First, will he make the usual arrangements for an extension of time in respect of the Appropriation Order, which is clearly of special importance? Secondly, is he aware that it should be possible on the same evening, with a little extra time, to deal with the Noxious Weeds Order if the Government will put that down, or put them down?

Mr. Foot: I am always eager to deal with noxious weeds as speedily as we can. I shall consider the right hon. Gentleman's suggestion in that light. I am most grateful to him for his other suggestion about looking at how we may order the debate. If extra time is wanted by Members from Northern Ireland in the way in which we have previously arranged—it has worked successfully before—we shall be glad to offer that.

Mr. Jay: Do the Government intend this year to introduce an import duties order, which is also taxation, to raise import taxes on food on 1st January?

If so, may we be assured that there will be time to debate it fully before it comes into force?

Mr. Foot: It is certainly not going to be debated next week, but there may be opportunities for the matter to be raised. I know that my right hon. Friend has always played a special part in previous discussions on these import duties, and I am sure that he will be looking for similar opportunities on this occasion.

Mr. du Cann: First, is the Leader of the House aware that the arrangements that he has now made for a debate on the Public Accounts Committee's Reports will be very much welcomed? It is necessary that the hard work of Members on both sides on Select Committees should be refreshed from time to time, and as frequently as possible, by the opportunity for full discussion of their reports in this Chamber.
Secondly, can the right hon. Gentleman tell us when we are to have a statement on the economy by the Chancellor of the Exchequer? Will the Leader of the House give an undertaking that following the statement, which presumably will come some time after 9th December, we shall have a full opportunity for debate?

Mr. Foot: I cannot say yet on which day the Chancellor will make his statement on those subjects. We shall have to await the statement to see whether a debate should take place at that time or later.
On the first matter, I am most grateful for the right hon. Gentleman's comments. We have always understood that time has to be provided. He has often raised this matter, and we are glad to make the time available in response to the representations that we have had from him and others.

Mr. Mellish: With regard to the National Insurance Surcharge Bill, am I right in saying that this is the Bill which implements what was said by, I think, the Chancellor last July? If so, what is all this hoo-ha about delay?

Mr. Foot: That seems a very simple way of disposing of the matter. I was trying to deal with it more delicately, but I thank my right hon. Friend for his assistance.
In order to correct any misapprehension about what I said in reply to a previous question, it is the fact that, with regard to the actual time that is being made available on Thursday for the discussion, we have been greatly assisted by the offer of a day from the Opposition. I should be the last to be churlish on that account.

Mr. Donald Stewart: Can the Leader of the House tell us whether, as he recently made two tentative attempts to have such a debate, he has a date in mind for the debate on transport?

Mr. Foot: We made a day available for that debate, and but for the events that occurred it would have taken place. Events outside our control truncated proceedings that day and made it impossible, which was greatly to be deplored. I know that several of my hon. Friends and hon. Members in other parts of the House wish to have a general debate on transport. I cannot give any promise at the moment, but I shall certainly consider these representations.

Mr. Tebbit: I remind the Lord President that unless he changes the rules Christmas Day will fall as usual on 25th December. Therefore, does he think it possible to look a little further ahead than he usually does and tell us when the House will go into recess and when we shall return after Christmas? That would be for the convenience of all Members of the House.
Secondly—[HON. MEMBERS: "Hear, hear".]—when the rabble has quietened down, can the right hon. Gentleman say whether he has yet found a precedent for compressing all the stages of a major taxation Bill in the way that he is proposing for next week?

Mr. Foot: With regard to the proposals for the discussion next week, I think that I dealt with that in my previous replies. The Government made these announcements some time ago, as my right hon. Friend the Member for Bermondsey (Mr. Mellish) indicated. There has been considerable discussion on this matter. I fully acknowledge that the Opposition would wish to have more time, and so might others, but we have to take into account the requirements of the Government in getting their business

through. I am sure that that is understood by all hon. Members.
As for the hon. Gentleman's request for an indication of when we shall rise for the Christmas Recess, I am sorry that I cannot give it, but I assure him that no Member of this House is more eager than I am for that day to come because I shall be able to have a few days when I do not have to gaze upon the hon. Gentleman's visage.

Mr. Canavan: Are we to have a statement from the Secretary of State for Trade about the financial dealings of Sir Hugh Fraser, who, at a time when we are all being told to pull in our belts, and at a time when the Government are reluctant to introduce a wealth tax, can afford to fiddle away over £2 million in gambling debts and heaven knows how much in financial aid to the SNP?

Mr. Foot: I am sure that my right hon. Friend the Secretary of State for Trade will take into account all the points that my hon. Friend has put so eloquently.

Mr. Graham Page: Did I understand the right hon. Gentleman to endorse the phrase of his right hon. Friend the Member for Bermondsey (Mr. Mellish) that the complaints about the programme for the National Insurance Surcharge Bill were all hoo-ha? Does he think it is hoo-ha when the printed Bill was not available to hon. Members until this morning and is to be brought in on Monday, with the remaining stages being completed two days later? Does he not think that that is a contempt of the rights of Members of the House, of the conventions of the House, and of responsible parliamentary Government?

Mr. Foot: I was very careful not to endorse the particular phrase used by my right hon. Friend. I merely expressed some element of gratitude for the general sense of what he was seeking to convey. I agree with what the right hon. Gentleman has said. Of course it is highly necessary that papers should be provided for the House at the proper time and that time should be provided for the House to discuss these matters. We took all these matters into account when we made these arrangements.
These proposals have been before the country for a considerable time. I accept


that there is some inconvenience for the House in having this debate on Wednesday—I am not seeking to disguise that—but I think that these are matters that we have stressed in our discussions with the usual channels, and I think that our case, as well as theirs, on the subject is appreciated.

Sir G. Howe: The Leader of the House must take this more seriously. Does he not appreciate that the Bill seeks to impose a load of taxation larger than that imposed in many previous Budgets, and that it was only when the Bill was published yesterday that we saw, for example, that, in contrast to the selective employment tax, the Government are seeking to impose this tax on jobs-not just on all jobs but even on the employment of people employed by charities and Churches? This is a major departure about which those organisations and others will wish to make representations. It is intolerable to bring in this kind of measure at such short notice to the House and to the country.

Mr. Foot: Of course it is necessary and right that organisations throughout the country should have an opportunity of making their representations, but this is a very short Bill, and we offered a rearrangement of business that could have assisted. [HON. MEMBERS: "No".] We made an offer which we thought was reasonable, but for perfectly valid reasons the Opposition did not prefer that rearrangement. I think, therefore, that I must ask the House to proceed to discuss the Bill as arranged.

Mr. Michael McGuire: May we have a debate on North-Western affairs? May I assure my right hon. Friend that while we are all very grateful for his efforts in arranging the last North-West affairs debate which, unfortunately, was shortened from its proposed extended period, we in the North-West feel that we should have this debate on the Floor of the House? Is my right hon. Friend aware of the feeling that if we take these debates upstairs in Committee they have been devalued? That sense of anger will grow, especially if we are to spend so many days discussing the devolution Bill without giving necessary attention to the affairs of a region with 7 million people.

Mr. Foot: I hope that my hon. Friend will not advance the proposition that, because we proposed that this debate should take place in the Committee upstairs, we were devaluing it in any way. We were not seeking to do that. We believe that important debates on regional matters can be held in those Committees and we shall need to do this if we are to have a proper discussion on these matters. I cannot offer the opportunity of an early debate in the House on the subject although, of course, there may be opportunities when the general subject can be raised. But if my hon. Friends wish for another debate in Committee, we shall of course look at that. If they want to debate the matter on the Floor of the House, we shall have to wait longer.

Mr. Pym: Does the Leader of the House realise—I feel sure that he does—that he has not satisfied us about next Wednesday's business? Whatever the complications about delaying the remaining stages for one day or into the following week, there is no need for it to be taken that quickly. The Bill was published only yesterday, and if his plans were adhered to, the whole measure would be disposed of in the House within one week. That is totally unsatisfactory when dealing with a major matter of legislation, even if the Bill happens to be particularly short. Cannot the right hon. Gentleman send it upstairs to a Standing Committee as we do with the Finance Bill? That is one possibility.
If the right hon. Gentleman is wondering what to do about next Wednesday, why does he not take off the remaining stages and put on instead a debate on one of the numerous reports about which the House constantly asks for debates?
Will the right hon. Gentleman also be sure that next week he will be able to say something positive about the handling of the reports to this House by the Chancellor of the Exchequer on the IMF loan and the Letter of Intent, so that the House can weigh up how—not in the following week because of the devolution Bill, but in the week after that—it might be appropriate and right to hold a debate on what is clearly a very important matter at this stage in our country's economic affairs?

Mr. Foot: I shall consider what the right hon. Gentleman said about a statement on the discussions with the IMF and


what may follow and what discussions are to take place in the House.
With regard to his first question, I cannot give an undertaking to alter what we have now proposed. We have already had considerable discussions on this subject, and I cannot promise to alter what we have proposed. I shall look at the right hon. Gentleman's suggestions. We made proposals to the Opposition on this matter, as the right hon. Gentleman will acknowledge, but I can give no undertaking that we shall change next week's business because we must get this business through and we have only a short time in which to do it.

Mr. Heffer: May I return to the question of devolution and ask my right hon. Friend how many days we are likely to have to discuss the devolution Bill? Is my right hon. Friend also aware that, irrespective whether the Government or the Opposition put on a three-line Whip, there are Members on both sides of the House who will not worry about three-line Whips on this fundamental question of the constitution? Is it my right hon. Friend's intention to say that we must be bound totally by the manifesto on the question, for example, of direct elections which does not appear in the manifesto and on which there is a Labour Party conference resolution contrary to what the Government are proposing?

Mr. Foot: The question of direct elections is governed by the decision made in the referendum, the result of which was accepted by the House. How far and how speedily we shall be able to proceed in the matter is another question.
I am surprised that my hon. Friend has questioned the reference in the manifesto to devolution. There is no doubt about the Government's commitment on this matter and we shall provide the usual advice to hon. Members with a three-line Whip on that subject. Hon. Members in all parts of the House have to decide how much accord or agreement they may have with three-line Whips. That is for their individual judgment.
This is certainly a Government measure and the Government believe that it is essential, in the interests of the United Kingdom as a whole, that it should go through in this Session. But we also believe that adequate time must

be provided for its discussion, and we propose to provide the time to get it through successfully in this Session.

Mr. Moate: May I ask the Leader of the House about the sound broadcasting of our proceedings? In particular, is he aware that, on the information we have been given so far, the cost could be nearly £1 million in the first year? While I appreciate the pressure on parliamentary time, could he give an assurance that, if a Joint Committee is to be established, there will be ample time for its recommendations to be considered by the House, particularly with regard to the cost and the timing of its proposals?

Mr. Foot: The hon. Gentleman has pressed his view since this matter appeared on the Order Paper, as he is entitled to do. Presumably he is seeking a debate on the question of reappointing the Joint Committee. He might consider whether it would not be better to use any debating opportunities to consider any recommendations that the Joint Committee may make. I hope that on that basis he will let the Joint Committee proceed to its discussions and they we shall have a debate when it returns to the House.

Several hon. Members: rose——

Mr. Speaker: I propose to call two more questions from either side of the House.

Mr. Buchan: Will the Leader of the House give consideration to, and perhaps comment on next week, the ringing declaration of Shetland, which has pronounced its allegiance to this Parliament and to the United Kingdom? Clearly, it is going to be a major problem for consideration by this side of the House. Above all, Shetland's forthright and generous statement that the revenues from oil found in Shetland waters belongs to and should be used in the interests of the United Kingdom as a whole clearly creates a major problem, since it destroys the entire basis of the Scottish National Party's argument.

Mr. Foot: I agree with my hon. Friend. I believe that the statement made on behalf of the people of the Shetland Islands is very important. This House must take it into account. Indeed, the Government has taken into account such


considerations in the form in which we have presented the devolution Bill to the House and to the country. We believe, of course, that the United Kingdom must be kept united for, among other reasons, the full exploitation of the great oil resources for the interests of the country as a whole.

Mr. Kershaw: Has the attention of the Leader of the House been drawn to Early-Day Motion No. 26, which deals with the desirability of proportional representation in the election of the Assemblies of Scotland and Wales? Has he, in particular, noted the very wide spectrum of opinion which has supported that motion? In view of that, will he, in this regard at least, come out for a free vote of the House?

[That this House, recalling the unanimous recommendation of the Kilbrandon Commission that Scottish and Welsh Assemblies should be elected by a system of proportional representation, urges Her Majesty's Government to make provision for such a system in the Devolution Bill.]

Mr. Foot: This is a matter for debate when we come to the Bill, and we shall come to the Bill fairly soon. Let us debate the matter then and see what is to happen. I am not referring to this matter alone. Of course it is the Government who are presenting the Bill to the House, but we fully recognise that there is bound to be consideration in the House and perhaps alteration to the Bill as it proceeds. That is only natural. We certainly do not intend to ram the Bill through the House without a single amendment, as was done on the last constitutional Bill, which dealt with the Common Market.

Mr. Robert Hughes: As my right hon. Friend recognises the wide variation of views in the House on the devolution Bill, will he take into account the fact that, on a major constitutional issue of this kind, with the best will in the world brevity cannot be too brief and hon. Members will need a reasonable opportunity to make their speeches? Will he therefore either look again at the number of days to be allocated to the Bill or consider extending the time limits, or indeed do both? Finally, will he resist the temptation whenever we have a devolution debate to have Front Bench

opening and closing speeches, since that would decimate the time available to Back-Bench Members?

Mr. Foot: My hon. Friend refers not to the general debates on the Bill but to debates in the week after next on the Second Reading of the Bill. I shall certainly take into account the representations he has made on all those matters, on which I am sure he speaks for many others besides himself.

Mr. Monro: Is the Lord President aware that some of the Government's policies for financing sport and recreation were clean bowled yesterday by the Royal Commission Report? Is he also aware that the Government White Paper on sport and recreation was introduced 15 months ago? When are we to have a debate on these two reports in Government time?

Mr. Foot: It so happens that I was not aware of any of the facts that the hon. Gentleman has mentioned. I have now been enlightened on them—that is, assuming that the hon. Gentleman's information is correct—and I shall certainly take into account what he has said and have a look at it to see what is the best way to deal with the matter.

Mr. Onslow: On a point of order, Mr. Speaker. May I put it to you that the House has not been left exactly satisfied by what the Leader of the House has said on the subject of the National Insurance Surcharge Bill. Although we must, of course, take in good faith his undertaking to look at the matter, we would expect him to give us now an undertaking to come back to make a Business Statement tomorrow if he has something to tell us.

Mr. Speaker: Order. The hon. Gentleman is asking a question.

Mr. Onslow: Further to that point of order—

Mr. Speaker: I did not consider it really a point of order. I thought that it was a question addressed to the Leader of the House.

Mr. Onslow: I apologise, Mr. Speaker, for expressing myself so maladroitly. I was seeking to put it to you that it would be for the convenience of the House, which is, I think, possibly a matter in


which you are interested, if we could secure some understanding as to how this matter is proceeded with. At the moment, next week's business is in a state of indecision.

Hon. Members: Answer.

Mr. Speaker: I am about to do so. Obviously, that is not in my hands. The business of the House is announced from the Front Bench.

BALLOT FOR NOTICES OF MOTIONS FOR MONDAY 20TH DECEMBER

Members successful in the Ballot were:

Mr. Ian Stewart
Mr. Stephen Ross
Mr. Michael Hamilton.

STATUTORY INSTRUMENTS, &c.

Mr. Speaker: In order to save the time of the House, unless there is objection, I propose to put the Question on the two motions relating to Statutory Instruments together.

Ordered,
That the Compensation for Limitation of Prices (Gas) Order (Northern Ireland) 1976 (S.R. &amp; 0. (NI), 1976 No. 308) be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the draft Capital Transfer Tax (Relief for Agricultural Property) (Northern Ireland) Order 1976 be referred to a Standing Committee on Statutory Instruments, &amp;c.—[Mr. Ashton.]

Orders of the Day — SOCIAL SECURITY (MISCELLANEOUS PROVISIONS) BILL

Order for Second Reading read.

Mr. Speaker: May I inform the House that I have selected the amendment in the names of the Leader of the Liberal Party and his colleagues?

4.3 p.m.

The Secretary of State for Social Services (Mr. David Ennals): I beg to move, That the Bill be now read a Second time.
This measure deals with a wide range of issues in the sphere of social benefits. Some clauses are designed to improve or simplify the operations of some of the major achievements of this Government —the Social Security Pensions Act, the new range of benefits for the disabled, and the child benefit scheme.
These changes are detailed, and so far as I know they are non-controversial. Nevertheless, they are adjustments in the law which need to be made if our social security schemes are to work effectively. I do not propose to detain the House this afternoon by going into these technical clauses, although they constitute the bulk of the Bill; we shall of course be debating them in Standing Committee.
Apart from the technical provisions, the Bill has four main purposes. I want to deal with each of these in turn, taking, first, the change which the Bill proposes in the earnings rule; secondly, the proposals relating to student support; thirdly, those which concern occupational pensioners' unemployment benefit; and, finally, the improvements in relation to the provisions for mobility and in some other spheres. I shall ask the indulgence of the House if I take a little time over this, because they are important measures.
Before turning to each of these four sets of proposals, let me make a general point. In the present economic situation it is surely common sense for the Government to consider where savings can be made in the social security budget by removing or diminishing the title to


benefit of people who have adequate financial provision from another source.
The uprating of benefits which became operative a fortnight ago was, in the Government's view, right and it was something of which we are proud. We shall go on protecting those who depend on the benefits of our social security schemes. But the reverse side of this medal is that we should take action to ensure that benefits are not made available where the need for them and the justification for them is manifestly not established. Clauses 4, 5 and 13 of the Bill will between them produce a saving in public expenditure in a full year of about £75 million. That is the central theme and motive of the Bill.
I turn first to the earnings rule, which is dealt with in Clause 5 and parts also of Clause 6. As the House will know, the retirement pensions which the National Insurance Scheme provides for men under 70 and women under 65 are not unconditional. They can be drawn only if the person concerned has retired. Once he or she has retired, retirement pensions are subject to reduction if the pensioner returns to work and has substantial earnings. This has been the situation ever since the post-war Government accepted the Beveridge recommendation that there should be a retirement pension, rather than an old-age pension payable at a fixed age.
I accept that the change from an old-age pension to one conditional on retirement has never been fully accepted by the public. Indeed, there would be advantages in terms of simplifying our pension scheme and reducing the costs of its administration if the retirement condition could be abolished completely. In the long term, this is not an option which the Government would want to rule out. But, in the immediate future, the cost of paying pensions to every contributor at 65 or 60, even if they remained in full-time work, is beyond anything that we could reasonably afford. Indeed, it would cost a very great deal, and, as I have said this Bill is essentially about saving money. We must proceed on the basis that for the time being the retirement condition remains.
But if we are to operate a retirement condition in a sensible way we must have

some sort of relatively simple test to distinguish those who can be treated as retired from those who cannot. Earnings offer a straightforward yardstick to apply. It is a matter of judgment where the dividing line should be drawn, but the Government would certainly argue that the present earnings limit of £35 a week, which came into operation this year and which then represented about 55 per cent. of average male earnings and over 95 per cent. of average female earnings, gets the answer about right. A pensioner can earn up to £35 a week and still be accepted as retired, and is eligible to draw his full pension. That means that it is open to him to do a good deal of part-time work—and in some cases full-time work—while still satisfying the retirement condition. Those who are debarred from drawing their pensions by the £35 limit will largely be people who have never retired in any true sense.

Mr. Eldon Griffiths: I have listened with great interest to the right hon. Gentleman's remarks about the problem of drawing lines. Is there not one line that can clearly be drawn, namely, between those who are compulsorily retired, for example, from the public service, and others who are not compulsorily retired? Why does he not accept that line? The police service would be a good example.

Mr. Ennals: That is a quite different point, which I do not want to deal with at the moment. That matter conies later in my statement. The hon. Gentleman cannot have been listening to what I was saying. I am dealing now with the earnings rule, not with occupational pensioners.
The present law requires that the £35 limit shall be replaced next April by one of £50 a week. This flows from a decision taken by the House almost two years ago, in the proceedings on what became known as the Social Security Benefits Act 1975. I know that some of my hon. Friends, especially those who, by their votes, carried the relaxation phasing vote in January this year, are unhappy that the Government are now seeking to alter that decision taken by the House. I can assure them that only the specially difficult financial situation we now face—considerably more difficult than it was in January 1975—has led the


Government to ask the House to change what was then decided.
Our attitude to the earnings rule has not changed since my hon. Friend the present Financial Secretary said at the conclusion of the debate on 29th January 1975:
Both the Chancellor and I accept the case for phasing out…. We recognise the need to continue this progress over the forthcoming years until the earnings rule is removed."— [Official Report, 29th January 1975; Vol. 885, c. 523-4.]

Mr. Arthur Palmer: On the matter of the occupational pension, is my right hon. Friend aware—he surely must be—that when an attempt was made to alter this principle of the right to unemployment benefit it was fought very bitterly by the Labour Party when in opposition?

Mr. Ennals: Will my hon. Friend be patient? I have not reached that issue yet. I promise the hon. Member for Bury St. Edmunds (Mr. Griffiths) and my hon. Friend that I shall deal thoroughly with the matter. Perhaps they will be patient, and perhaps it would be better if I were a little less patient in giving way to interventions, even though they are honestly intended. I am sure that some of my hon. Friends who were very doubtful about our decision to return to the House on the issue will be relieved at the statement I have just made concerning the Government's intentions.
Meanwhile, however, our proposal to keep the figure at £35 will mean that the cost of pensions will be substantially less in 1977–78 than if we allowed the £50 limit to come into force. The change will affect only a handful of existing pensioners; the savings will come very largely because we shall not have to make any new awards of pension to people who are earning £40, £45 or £50 a week and are at present deferring their retirement.
However, of course, the story does not end there. As I have said, the £35 limit, taken as a proportion of average earnings, can fairly be said to represent a level at which earnings are consistent with retirement. If the earnings limit is to be determined on this basis, it would not be logical if it failed to rise as earnings do, and it is for such a rise that Clause 6 makes provision. As from the general uprating of benefits which will take place next year, the earnings limit will be one

of the figures which the Secretary of State is bound by law to review and to raise in line with the general movement of earnings. So we have not set a figure that is now immutable.
If these measures were not carried, the cost of raising the limit next April from £35 to £50—about £45 million—would have to be borne by contributors and taxpayers in general. Extra retirement pensions for 35,000 people, 15,000 of them married men, would cost £40 million before tax. A further £15 million would be spent on the higher benefits, which retirement and invalidity pensioners, and certain other long-term beneficiaries, can draw for their dependent wives. In addition £5 million in contributions would be lost. Against this gross total cost of £60 million, the Government Actuary estimates that £15 million would be obtainable in increased tax revenue. This gives the net figure of £45 million which I have mentioned, and which is the sum that we must save.
One reason for giving the detailed figures was that I knew that the right hon. Member for Wanstead and Woodford (Mr. Jenkin) questioned the figures on Thursday. Any points that he raises in his speech, which follows mine, will be dealt with by my right hon. Friend the Minister for Social Security in replying to the debate. I believe that this is a sensible economy which will be justified in the light of the current economic situation.

Mr. Patrick Jenkin: The figure of £60 million in the Financial Memorandum to the Bill is a gross figure.

Mr. Ennals: That is right. It is a gross figure. The figure of £45 million is the net figure.
I come now to the question of students and the proposal in Clause 13 to remove their entitlement to supplementary benefit in the Christmas and Easter vacations. In practice, this will not make any material difference to the majority of students, as I shall explain.
At present, students can qualify for supplementary benefit during the vacations, provided they register for work. For the current academic year, their maintenance grants include a vacation element of an increased amount of £11·35 per


week for the Christmas and Easter vacations, which is enough to cover their requirements by supplementary benefit standards if they are staying with parents or relatives. Only a minority, living as householders with continuing rent commitments or other special needs, will get benefit. For the long summer break, there is no vacation element in the grant, and more students will receive benefit, although many will no doubt get temporary jobs.
The Government agree with the views of the Supplementary Benefits Commission that supplementary benefit is not, in principle, the appropriate forum for students to look to for their maintenance. The proposal in the Bill is to place on a permanent and statutory basis what we consider to be sensible arrangements for students. These are, broadly, that, subject to a hardship scheme, which is to be introduced to cover contingencies such as students who have inescapable rent commitments and other hardships, supplementary benefit will not be paid during the Christmas and Easter vacations. During these times students must look to their recently-increased maintenance grants.

Mrs. Audrey Wise: Is this hardship provision to be at a lower level or with more stringent conditions than the Supplementary Benefits Commission's means test? If it is to be similar, why do we need two identical but separate schemes?

Mr. Ennals: We shall be working out the nature of the hardship scheme, and discussions are now taking place with my right hon. Friend the Secretary of State for Education and Science. I cannot give details of the criteria now, but we felt that if we were to make any change—this proposal involves only £1 million—we should have a hardship scheme.

Mr. John Garrett: Is my hon. Friend aware that this scheme continues the fictional assumption that parents who are assessed as making a parental contribution actually make it? Is he also aware that three-quarters of such parents do not make a contribution towards a student's upkeep?

Mr. Ennals: My hon. Friend's point is valid, but it emphasises the fact that

it is not the task of the Supplementary Benefits Commission or unemployment benefit to deal with the question of student maintenance during short vacations. As for long vacations when students are genuinely available for work, we are dealing with a different situation, and, as my hon. Friend knows, it is not the intention of the Government to legislate in this respect.

Mr. Ian Mikardo: Mr. Ian Mikardo (Bethnal Green and Bow) rose—

Mr. Ennals: I have much to deal with and I have given way many times. Nevertheless, I give way.

Mr. Mikardo: I am very much obliged to my right hon. Friend. What he says is puzzling. Some hon. Members are trying to follow what he is proposing in order to decide what we shall be doing at the end of the day, and I am therefore grateful to him for giving way. He said that it is not the business of the scheme to do such things. I have always understood that it is the business of the scheme to ensure that nobody who falls below the safety net—to use the shorthand term—for whatever reason, is not raised to that level. A student with children or other dependants or who has rent to pay will fall below the safety net level.
I return to the point made by my hon. Friend the Member for Coventry, South-West (Mrs. Wise). If the new scheme provides the same amount of money for the same needs, there is no point in it. If it provides less, or anything different, it violates the principle of the universality of the safety net.

Mr. Ennals: I shall ask my right hon. Friend to deal in greater detail with the points made, including those made by my hon. Friend. I made it clear that there would be a hardship fund and that the sort of thing with which it would be concerned would be precisely the sort of matters that my hon. Friends have raised, namely, rent commitments during the short vacations. It would be wrong to make a change, because, after all, it is a change both in supplementary benefit, which requires legislation, and in unemployment benefit, which does not require legislation but will be dealt with by regulation in due course. But the principles here are the same. We felt it right


that there should be a hard ship fund to ensure that no one would be in hardship as a result of this arrangement. I am saying, therefore, that other of these points will be dealt with thoroughly by my right hon. Friend when he replies to the debate.
There is no question, as some Press comments have suggested, of this arrangement becoming operative immediately. Some people have thought that it would come into operation before Christmas. The intention is that, subject to the Bill's becoming law, it should operate from the academic year 1977–78—that is, with the Christmas vacation of 1977 being the first affected.
Certainly there is no question that, as the NUS National Secretary was reported last week as saying in The Times,
he result will be that thousands will have to leave their courses.
What is involved here is a sensible realignment of sources for student support, subject to hardship provision, which I believe is thoroughly justified on merits, and which in no sense represents any unfair picking on any students.
Apart from the financial savings, it will relieve much of the pressure upon local offices of my Department, the Department of Employment, and the Employment Service Agency, which, in recent years—but only very recently—have had to deal with an increasing number of claims concentrated around the Christmas and Easter holidays. We have to recognise that this is an entirely new feature, which has arisen only in very recent times.

Mr. Christopher Price: On the Government side of the House there is great interest in the hardship fund. Does my right hon. Friend realise that an increasing number of students are not the 18-year-olds who are generally thought of as students but mature people with families, who have paid as much in contributions as anybody else in the country, and that the hardship fund will need to be considerably enhanced if it is to satisfy hon. Members on this side?

Mr. J. W. Rooker: On a point of order, Mr. Deputy Speaker. Is it possible for the debate to be adjourned until a Minister from the Department of Education and

Science can be present on the Front Bench, or, alternatively, for a message to be sent that a Minister from that Department is required here? It is clear that my right hon. Friend will not be able to answer the points made about students.

Mr. Ennals: I indicated to my hon. Friends that this was an issue that would be dealt with in much greater detail by my right hon. Friend in winding up the debate. I know that he will seek to satisfy the concern that has been expressed.
I am anxious to come to another contentious issue, namely, unemployment benefit for occupational pensioners. This must be the main substance of my speech, because a good deal of concern has already been expressed about it. It is highly controversial and, as my hon. Friend said, it is an issue that has been under debate for many years.
I start with the advantage—some would say disadvantage—of having first raised the issue when I was Minister of State in this Department and made an announcement of Government intentions in 1969. I told the House on 15th December of that year of the decision that the Labour Government of that day had reached. The story goes back much further than that, because it was the Minister of Pensions and National Insurance—Peggy Herbison, back in 1966 —who first referred the issue to the National Insurance Advisory Committee. She did so because even then there was public concern, summed up in the feeling that unemployment benefit was never intended to be paid to people who had basically retired from work, and had done so on a substantial occupational pension.
The National Insurance Advisory Committee considered the matter for nearly two years and reported in January 1968 to my right hon. Friend the Member for Lanark (Mrs. Hart), who had by then taken over as Minister of Pensions and National Insurance. In its report, Cmnd. 3545, the Advisory Committee agreed that there was a serious misuse of the national insurance scheme in the existing provisions, and they made recommendations to deal with it. The Advisory Committee concluded that there was no satisfactory way of tightening up the availability condition and that more positive measures were needed. Accordingly, it proposed restrictions on the unemployment benefit


of occupational pensioners, on a sliding scale starting at £5 a week. We introduced—I was then Minister—a number of easements into the Committee's recommendations and sought to take action by regulations.
However, the 1970 General Election intervened before the regulations, which were subject to the affirmative resolution procedure, could be debated. At that point, therefore, hon. and right hon. Gentlemen on the Opposition Benches, having assumed responsibility in government, accepted the principle of my proposal and included it in their National Insurance Bill in May 1971.
What happened next will probably be within the recollection of a good many hon. Members. When the relevant clause was debated in committee upstairs, my right hon. Friend the Secretary of State for Education and Science and Paymaster General, who was leading for us in the Standing Committee, moved an amendment, which was carried against the Conservative Government as the result of the abstention of five hon. Members on the then Government side of the Committee.
I have gone into the history of this matter at some length, because it puts into perspective how it comes about that now, five and a half years later—in fact, almost 10 years after the issue was referred to NIAC—I am presenting a legislative proposal on it to the House.
Three points seem to me to stand out The first is that over many years there has been repeated concern on this issue of the payment of unemployment benefit to occupational pensioners and, what is more, common concern by Governments of both parties to deal with it.
Secondly, the approach has been one of gradually easing the restrictions making the application easier and simpler in order to achieve a necessary saving and to ensure that they did not bite unduly hard on those affected. I shall have more to say on this later.
Thirdly, what I think is now clear in a way that perhaps it was not five years ago is that this is not a problem to which the answer can lie by way of any amplification of the availability test, nice as that would be in theory and as it has been argued progressively by speakers on both sides of the House. Availability for

work is, in a sense, an attitude of mind. It can be determined only by offering a person a job and seeing whether he accepts it. But job opportunities for elderly workers are very scarce, particularly in the rural and coastal areas to which many occupational pensioners retire and, in present employment conditions even more than at other times, it would be in practice just not on to test their availability by the offer of a job. In fact, the advisory committee reached the same conclusion in 1968, when employment conditions were very much better than they are now.
What I am saying to the House is that the arguments for a change in this matter were strong in 1968–69. They were considered even stronger in 1971 and I believe that they are stronger still today. The need for restraint in Government expenditure is greater than ever. In addition, there is a need which we have to recognise that we must ensure that public funds are properly spent and that there is no misuse or abuse of public funds.

Mr. Dennis Skinner: If there has been public concern over these years, so much so that it resulted in all this effort coming to naught as a result of its being presented to the House of Commons—in other words, getting nowhere—why is it that the level of £25 is not even equitable to the £18 the last time it was thrown out? On the subject of availability for work, did my right hon. Friend say something entirely opposite to what he is saying now when we had the argument about the Spanish holiday fiasco? Will he also accept that occupational pensions are deferred pay?

Mr. Ennals: I want to come to the argument about deferred pay. Of course, there will always be opposition to any legislation that seeks to take away anything that anyone now considers to be an absolute right. No one can ever expect that there will be support for it. I think that it is time the nettle was grasped. This view has been held on both sides and it is time that we took some action about it.

Mr. Anthony Steen: The Minister says that he is concerned about the level of public expenditure. In that case, why will he not introduce legislation to restrict supplementary


benefits to unemployed school leavers who have not paid a penny into the National Insurance Fund? There are a thousand and one jobs that they could do in the community.

Mr. Ennals: There is a whole range of reactionary proposals which could come from hon. Members opposite. In fact, I am surprised that the hon. Member for Aberdeen, South (Mr. Sproat) is not here with some of his proposals to deal with the situation. I am dealing with people who can afford to face whatever difficulties may follow from this legislation.
I ask the House to treat this matter very seriously. I honestly believe that there are times when things like this bring the House into disrepute—[Interruption.] —times when the Opposition say one thing in government and something quite different when they are out of office. I believe that we must face these problems of public expenditure, and that this is one field in which we can face them. It is appropriate that we should look very closely at the actual measure that I am bringing forward.
The benefit that I am restricting is unemployment benefit, which, at any one stretch, can last only for a maximum of one year. Some hon. Members have argued that we are taking away the right for five years between the ages of 60 and 65. But unemployment benefit is limited to 312 days, and there is no question of its lasting for the whole period between 60 and 65.
The relevant provisions of Clause 6 provide that the level of £25 for occupational pensions, at which unemployment benefit would start to be reduced, should be reviewed and uprated, in line with earnings, as part of the general annual review of benefits from and including the review in 1978. This will be done in the same way as the earnings rule is reviewed and changed.
How will occupational pensioners be affected by this? Here again, I think there has been a misunderstanding in some quarters. The proposals relate only to occupational pensioners aged 60 and over. Their unemployment benefit will be reduced by 5p for every 5p for which their occupational pension exceeds £25 on a sliding scale. Thus, with an occupational pension under £25 there would

be no effect. With an occupational pension of £30, the unemployment benefit payable—I am now referring to a married man with the full entitlement to flat-rate benefit and maximum earnings-related supplement at 1977 rates—will still be £28·08. With a pension of £40 it will be £18·08 and with a pension of £50 it will be £8·08. Only where the occupational pension is £58·10 or more a week will the unemployment benefit for a married man become totally extinguished.
The Liberal amendment refers to increasing hardship for a disadvantaged section of society, but here we are talking about a married man who will be getting a degree of unemployment benefit even if he has a pension well over £50. For a single man the corresponding figure is £50·10. These figures make it clear that there is no question of hardship.

Mr. Patrick Jenkin: There is just one point here which has not emerged from the Secretary of State's explanation. If, on the sliding scale, a man gets an increase in his occupational pension and loses his unemployment benefit, he will be actually worse off in the end, because the increase in his occupational pension is taxed but his unemployment benefit is not.

Mr. Ennals: That situation is in no way changed as a result of this legislation. Occupational pensions have always been taxed, and short-term unemployment benefit is not taxed. The legislation in no way changes that.

Mr. George Cunningham: Let us get this straight. At the moment, if someone gets an increase in his occupational pension he keeps his unemployment benefit and therefore he is not actually worse off. In future, he will lose any unemployment benefit. What he gains in his occupational pension will be taxed, but the unemployment benefit which he loses is not taxed, so he will be actually worse off. Will the Secretary of State confirm categorically that the situation described by the right hon. Gentleman is correct, and that a man will be worse off in the situation that has been described?

Mr. Ennals: I do not want to get my words wrong in any way. I shall ask my right hon. Friend to deal with this matter when he winds up. That is the purpose


of having a right hon. Friend to wind up the debate.
I now deal with those who will be affected by this measure. All told, there are in this country about 2·7 million occupational pensioners, men and women, at all ages over 60. Of these, we estimate that about 70,000 may be registered as unemployed in 1977. Of these about 40,000 are likely to be receiving unemployment benefit. We estimate that about 16,000, or 40 per cent., are likely to be affected by the provisions in the Bill because their occupational pensions exceed £25. That means that 16,000 will be affected, out of a total of 2·7 million over 60. Who will these 16,000 people be? [AN HON. MEMBER: "Hospital porters."] Not at all. The majority are likely to be those in some form or other of the public sector. I know that there is concern about Post Office workers. I checked with the Post Office, and it confirms that the average pension for monthly-paid former employees is about £21 per week. For weekly-paid former employees it is about £11·50. Therefore, one can see that the majority of those retiring from the Post Office are not affected by the legislation.

Mr. John Ovenden: I believe that my right hon. Friend is saying that the Post Office is taking these calculations on the basis of all present retired post office pensioners. But what is the current average level of pension for those retiring today and in the future? My right hon. Friend says that he has consulted the Post Office, but has he consulted the Union of Post Office Workers, the Post Office Engineering Union, and the other unions involved?

Mr. Ennals: Of course I have had discussions with the unions. They opposed these measures. I was able to explain to them that they would not affect the majority of their members. The figures I gave were of monthly paid employees in the early stages of retirement. The average is about £21 a week. Over the most recent period, the average pension of retiring civil servants is about £22 a week. Averages necessarily represent a wide spread of figures—some more, some less
My information about the spread in the Civil Service is that of the 25,000 or so

new pensioners in the year ended on 30th September 1976—the up-to-date figures —13,000 were below £15, 5,000 were between £15 and £25, 2,500 between £25 and £35, 2,000 between £35 and £50, and 2,500 above £50. In other words, over 70 per cent. were under the £25 figure. Therefore, their benefit will in no way be affected even to the tune of £1. I also appreciate that there are people for whom the aggregation of more than one small occupational pension will produce a total in excess of £25.

Mr. Arthur Palmer: I apologise to my right hon. Friend for intervening too soon earlier in the debate. That was a measure of my indignation. Supposing these individuals had saved their money in some other way, for example, by private investment. There might conceivably be an energetic millionaire living in Park Lane who wants to go on working. He would be entitled to draw his pension without let or hindrance. Why should these particular people be singled out in this way?

Mr. Ennals: This is not a strict means-tested benefit. On another occasion, my hon. Friend said that it was deferred pay for people who retire.
The perfectly reasonable view of the National Insurance Advisory Committee is that if retired people who have been paying contributions in expectation of their retirement on a particular day, also get unemployment benefit, it could be said that they are being compensated twice. These are people who are in retirement. They knew that they would retire at that age.
I have been talking about people at one end of the earnings scale. I shall now say a word or two about those at the other end. We know that in July of this year 7,000 people between 55 and 64, registered as unemployed and receiving unemployment benefit—the majority of them over 60—were in receipt of occupational pensions in excess of £35 a week. Much the greatest part of the estimated full-year saving from the proposed change of £14 million—£12½ million—will be derived from this group of pensioners with occupational pensions above £35 a week—typically, perhaps, retired civil servants and local government officers formerly in senior positions, ex-senior officers of the Armed Forces and


retired bank managers or former departmental heads with insurance companies. Those are the bulk of the people who will be affected by the legislation.
We are entitled to assume that those concerned—not a homogenous group but people who consciously retire at that age—are not motivated towards continued employment after they have retired on their occupational pension. Many people are demanding that they should be able to retire at 60. They are not doing that, because they want to go on working after 60. We are talking about people who have retired. Why should we encourage retired people to search for jobs? They have an occupational pension and the jobs for which they are competing are in short supply. It is simply not sensible that we should encourage people who have retired at 60 to take up employment.

Several Hon. Members: rose—

Mr. Deputy Speaker (Sir Myer Galpern): Order. The right hon. Gentleman clearly indicated that some of the points being dealt with by way of interventions will be covered in the winding-up speech by the Minister.

Mr. Robin Corbett: Why does my right hon. Friend make any assumptions about people who retire at 60? Is he telling the House that it is beyond the wit of his Department to know whether people have retired voluntarily or involuntarily? Is that not the distinction that should be made?

Mr. Ennals: The people we are talking about have been in employment and have retired. The vast proportion knew that they would retire at that age, and they have an occupational pension which was designed for retirement at that age. The vast proportion of the people we are talking about knew that they would retire at 60 because that was a condition of their employment, and they paid contribuntions to enable them to receive an occupational pension when they retired at 60.

Mr. Steen: rose—

Mr. Ennals: I have given way far too often. I have already given way once to the hon. Gentleman.

Mr. Michael Shersby: Is not the right hon. Gentleman aware that many people who planned to retire on their occupational pension find it impossible to live on that occupational pension, because of the inflation of the last few years, and are driven to seek further employment? Is he not also aware that many people who have valuable experience to contribute will seek employment?

Mr. Ennals: I am not surprised at that intervention from the hon. Gentleman. We are here talking about people who, when the legislation is implemented, will get either from an occupational pension or unemployment benefit between £50 and £60 a week. Opposition Members have been talking about a very different group of people and suggesting that unemployment benefit limits should be reduced.
If we are to seek for areas of savings, this is one saving which we should consider, on whichever side of the House we may be.

Mr. Steen: Will the right hon. Gentleman give way?

Mr. Ennals: No, I shall not give way.
I want to deal with the principle. I have been talking about hardship, and I have effectively proved that the measure will not cause hardship. Some people talk about unemployment benefit as if it were an unconditional benefit. It is by no means so. As long ago as 1968, the National Insurance Advisory Committee, in its report, said that it did not believe that retirement from pensionable employment necessarily constituted "unemployment", in the sense that the term is used for National Insurance Scheme purposes. The Committee doubted
whether it was ever intended that people retiring at the end of a career in pensionable employment should qualify for unemployment benefit at all.
The Committee also considered that as an occupational pension paid by an employer provides some compensation for loss of earnings in the same way as unemployment benefit was intended to do, there was an overlap between the two. That was the unanimous view of the National Insurance Advisory Committee, with one honourable exception—Lord Collison.
The Committee also drew attention, even then, to several instances in the national insurance scheme where payments of unemployment benefit were already affected by payments made by an employer or former employer. [Interruption.] If my hon. Friends are interested in the principle, perhaps they will direct their attention to my remarks. It was pointed out, for example, that benefit is not payable if a person's earnings from a subsidiary occupation exceed, at present, 75p a day. Dependency benefit is withheld if the amount of the dependant's earnings exceeds the amount of that benefit. Benefit can be withheld for up to a year if a man whose contract of employment is broken receives a payment from his employers that contains compensation for future loss of earnings.
In the light of all these examples, the charge that our proposals constitute an erosion of the insurance principle is one that cannot be accepted.

Mr. Steen: rose—

Mr. Ennals: No, I have given way to Opposition Members on previous occasions. If I give way again, it will be unfair to the rest of the House and to those who want to take part in the debate.
Over recent weeks we have had a great deal of talk about the uprating of benefits and the abuses to which the upgrading is said to have given rise. However we are talking now not about the low-paid and the genuinely unemployed but about people who have retired with a substantial and significant occupational pension. Conservative Members are constantly demanding of the Government that we should carefully examine the social security system and ensure that funds are in no way misused. It is extraordinary that they should attack us when we have established one area in which to take action.

Mr. Wyn Roberts: rose—

Mr. Ennals: No, I shall not give way. I wish to deal with the last section of my remarks. I have reached the last of my main headings, namely, the miscellaneous improvements that the Bill brings about. The hon. Member for Conway

(Mr. Roberts) and other hon. Members will be able to catch Mr. Speaker's eye.

Mr. Wyn Roberts: rose—

Mr. Ennals: Very well, I give way to the hon. Gentleman.

Mr. Wyn Roberts: The Minister keeps talking about the Bill dealing with those who are well off. If that is so, why have we received many representations from the Council of Post Office Unions, for example? Concern has been expressed by that council and by other organisations on behalf of humble people of that sort.

Mr. Ennals: They are quite naturally and honourably making representations on behalf of what is a minority of their members. If a minority of their members finds that their substantial occupational pensions affect the level of unemployment, one would expect a union to speak up. A union would do so if only a minute proportion of its members were affected. It is only a minority, but I think it is right that the unions should speak up. I am not surprised that they have made representations.

Mr. Eldon Griffiths: rose—

Mr. Ennals: No, I shall not give way again.

Mr. Eldon Griffiths: Mr. Eldon Griffiths rose—

Mr. Deputy Speaker: Order. Mr. Ennals.

Mr. Ennals: I am grateful, Mr. Deputy Speaker. I think that I have been generous in giving way to both sides of the House. I now turn to the miscellaneous improvements and deal first with Clause 12.
On 13th September 1974 my predecessor announced a new cash benefit—the mobility allowance—that would be available to severely disabled people who are unable, or virtually unable, to walk because of physical disablement. Entitlement to the new allowance, unlike entitlement under the vehicle service scheme, does not depend upon ownership of or ability to drive a car. An extremely important decision was taken by my right hon. Friend. Eventually these provisions will extend mobility help to an estimated 100,000 new beneficiaries who have previously been left out simply because they are non-drivers.
My right hon. Friend also announced at the same time that the tricycle was to be retained as an alternative to the cash benefit for those who satisfied the conditions for the allowance but preferred to have the tricycle.
The problems of maintaining standards of road safety led me on 23rd June 1976 to tell the House that after one further order production of the trike would cease, and that it would no longer be available to new claimants. Existing stocks and the final order should ensure, however, that existing trike holders who want to continue with them can do so for at least another five years.
We are now proposing, through Clause 12, that existing vehicle service beneficiaries should be able to switch automatically to mobility allowance, being deemed to satisfy the medical requirements for an award, and to receive it without the age restriction which applies to those who can now claim for the mobility allowance.
The main aim of the extension is to give trike holders under the pre-1976 scheme the opportunity, where they are not already eligible, to switch to mobility allowance. Others with reserved rights under the old scheme will also be covered.
Extending the availability of the allowance in this way will mean a modest increase in expenditure. The eventual cost, after taking into account savings on the vehicle scheme, will be about £3 million.
Another improvement that we propose is contained in Clause 8. It eases the conditions for entitlement to industrial death benefit where a prescribed industrial chest disease, such as pneumoconiosis, is involved. It will remove the delay and consequent uncertainty that can arise when a medical opinion, based on the results of a post-mortem examination, is awaited. This is something that we have thought right to do for some time, and this measure provides an opportunity to remove what some people have considered to be an injustice.
Clauses 9 and 10 make substantial improvement in the administration of certain benefits available under old schemes to a shrinking number of beneficiaries suffering from industrial diseases.

Clause 11 will make what I believe to be a desirable simplication by enabling us to bring together the war pensions instruments for the three Services.
Clauses 13 and 19 slightly differently remove references in legislation to "cohabitation"—a word that some have found offensive. It will substitute expressions such as "living together". This is one of the recommendations made by the Supplementary Benefits Commission. Clause 15(1) eases the present requalification test for unemployment benefit, as the test operating from April 1975 has been found to be somewhat harsh in practice. This easement, which we intend shall operate from April 1978, will, I know, be welcomed by casual workers, including dockers and musicians.
I have come to the conclusion that cannot pretend that this is an exciting Bill. It does not offer many new horizons. I should have been much happier to be the Minister who introduced legislation that created the new pension scheme, the child benefit scheme and the disablement scheme. At present I am a Minister carrying out a tidying up operation. I wish that the Bill were a measure to extend the frontiers of the Welfare State. Perhaps that will come next year or the year after. Perhaps I shall be able to come before the House with such proposals. However, I claim that the Bill has a modest virtue in that it saves us £75 million in a full year. That will be a contribution to reducing public expenditure.
We are achieving this curtailment not by reducing State provision for people who have no other source of income but by ensuring that national insurance benefits and supplementary benefit do not duplicate other sources of finance that are already available. In the longer term. the usefulness of the Bill will lie in the technical provisions that it includes and the contribution that it makes towards a more sensible and streamlined system of social security. As such, I commend the Bill to the House.

4.59 p.m.

Mr. Patrick Jenkin: This may not be a very exciting Bill, but the debate so far has been very exciting. The Secretary of State had a pretty rough ride from a number of his hon. Friends. I do not know about my right hon. and hon.


Friends, but I gained the impression that the right hon. Gentleman was not always too clear about the answers.
I am not sure at what time the Minister for Social Security will rise to reply to the debate—that is a matter for the Whips—but he already has a great many questions to answer, and by the time that I have finished he will have a few more.
Naturally, the Secretary of State focused a great deal of attention on Clause 4. That provision, as he said, has a long history. Its effect will be to deprive occupational pensioners of their right to unemployment benefit if they are unable to find work. I should make it clear that the Conservative Party is opposed to that clause and will seek to delete it at later stages of the Bill. I shall deploy the argument for its deletion later.
The Bill contains a number of provisions, some welcome, others less than welcome. For that reason it would not be sensible to seek to defeat the Bill on Second Reading. I shall suggest to my right hon. and hon. Friends that we do not oppose the Second Reading tonight. There will be other and more sensible opportunities to amend the Bill.
I notice that the Liberal Party has tabled a reasoned amendment. If that were carried it would lose the Bill. I think that the hon. Member for Rochdale (Mr. Smith) would then have some difficulty in explaining to the elderly disabled who stand to benefit under Clause 12 why he voted against the Bill and therefore prevented the extension of the mobility allowance to certain categories of people who move into retirement. How would he explain to single-parent families the failure of the House to implement what I accept are the more sensible rules for dealing with what has been called "the cohabitation rule"?

Mr. Mikardo: We might have another Bill tomorrow.

Mr. Jenkin: The hon. Gentleman suggests that we might have another Bill tomorrow. I think that he is pitching his hopes too high. The sensible course is to give the Bill a Second Reading and then to take out or to amend clauses in Committee or on Report.

Mr. Mikardo: That sounds great in logic. I only know—I have been here a long time—that whenever that view has been taken in the past, nine times out of 10 it has proved impossible to take a clause out.

Mr. Jenkin: I am prepared to rely on the precedent of what happened when the National Insurance Act 1971 was introduced with a number of "goodies" and this "baddy". It was introduced by my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph). The Bill, as it was, received an unopposed Second Reading. In Committee the clause was defeated and the Government did not seek to put it back on Report. I think that the hon. Member for Bethnal Green and Bow (Mr. Mikardo) and the Liberal Party would be unwise to scrap the rest of the Bill because of their acute dislike of Clause 4.
I make it clear that if the Liberal amendment or Second Reading is pressed to a Division, I shall advise my right hon. and hon. Friends not to go into the Lobby. I suggest that we should deal with Clause 4 at a later stage.
Before coming to the four substantial points to which the Secretary of State referred, I should like to raise three general matters. The first concerns the inquiry set up by the Secretary of State following the first annual report of the Supplementary Benefits Commission. I welcome that report. It is a valuable innovation. I also welcome the more open way that Professor Donnison is handling his responsibilities than his predecessors had been encouraged to do. The annual report is a very good example of open government.
The Committee has now started work. When is it likely to reach a conclusion? The Secretary of State said that the results will be published. When is that likely to happen?
I ask that question because there is one central issue to which the House will wish to direct its attention. I should like to quote from the most recent issue of the "SBC Notes and News":
The ideal towards which the Commission would like to see policies directed is a world in which large social groups, such as pensioners, the long-term sick and students, whose needs are in total reasonably predictable, would rarely have to rely on means-tested benefits. 'Households of average size should rarely have


to turn to supplementary benefit when drawing contributory unemployment and sickness benefits,' the Report states, 'Now that a more generous pensions scheme is slowly taking shape, the adequacy of family benefits in general, and the new child benefits in particular, seem to us to be the most urgent concern of the whole field of social security.'
Speaking from the Opposition Dispatch Box, I strongly endorse those comments. That was the central theme of the tax credit proposals put before the House by the previous Government, of which I was a Member. That was the purpose of the child benefit proposal, which, disastrously, the Government slid away from, and which is now to be introduced only slowly, in stages. We need to lift a large number of households out of supplementary benefit altogether. That is the central message of Professor Donnison's report.
The biggest single group in this category would be pensioners. For them a tax credit solution would be a welcome way of dealing with the matter. The cost of introducing tax credits has been reduced, because the tax threshold is so much lower in real terms. Therefore, fewer people would have to be paid the full value of the tax credit which would replace the tax allowance. The Government have so far refused to embrace the tax credit principle, with the sole exception of the child benefit scheme. I want to know when the report is likely to be available. Professor Donnison has made it clear that for him the tax credit solution is the only effective way forward in this area.

The Minister for Social Security (Mr. Stanley Orme): Not necessarily.

Mr. Jenkin: I am paraphrasing what Professor Donnison has said in a number of speeches that he has made. The relevance of the SBC's study is the need for the Government, if they can, to try to secure some coherent strategy, which is notably lacking on their side but which we, with our continuing commitment to the progressive introduction of the tax credit solution, can claim to have.
Secondly, is the Minister for Social Security able to tell us anything about the rash of minor administrative amendments that have been put to his Department by the occupational pensions interests? Many of those amendments are necessary to correct obvious misdraftings and minor administrative points in the

Social Security Pensions Act 1975. The Chairman of the National Association of Pensions Funds, in his letter to the Minister on 4th October, referred to "administrative only" and "genuine drafting errors". It would seem that an opportunity has been missed to put those things right. I recognise that the question of member participation will have to be left over while further consultations continue, but I hope that the Minister will be able to tell us something about that matter.
Finally, when will the Government be able to tell us about the impact of the pay policy on improvements in pensions schemes? The Government must realise that, as the day for contracting out approaches, it is becoming increasingly important for firms to know whether and when they will be able to implement improvements which go beyond the minimum necessary for contracting out. I know that this matter has been pressed upon the Government not only by the employers and pensions interests but also by a number of trades unions.
After those three more general points, I turn to the Bill. I think that most of the minor provisions can be dealt with sensibly in Committee. However, there is one to which I must draw attention on Second Reading. I refer to the provision in Clause 19(5) dealing with the new and what seem to me to be greatly extended disclosure rules by the Inland Revenue. It may be that, as a former Treasury Minister, I am over-sensitive about that matter. I am sorry that the Chief Secretary, who was with us for a short time, has left the Chamber. I appreciate that he attends more Cabinet committees than anybody else. At least, that was so in my day.
The question of disclosure by the Inland Revenue is extremely sensitive. I recognise that earlier national insurance and pensions Acts have contained provisions dealing with disclosure for such purposes as earnings-related contributions and benefits. But Clause 19 (5) seems to blow a gaping new hole in the screen of confidentiality which must always surround matters conducted by the Inland Revenue. Subsection (5) refers to payments made under the Employment and Training Act 1973, and permits disclosure not just to another Department but to some of its agencies, that is, the


Manpower Services Commission, the Employment Service Agency and the Training Services Agency.
I must ask the Minister for Social Security to tell us a little more about what is involved here. How will the confidential information given by taxpayers to the Inland Revenue under strict secrecy be protected when it reaches the hands of the commission and the agencies? Information about taxpayers' affairs is always handled in the strictest secrecy by the Inland Revenue—no Treasury Minister, not even the Chancellor himself, is entitled to have such information without the consent of the taxpayer—and that is essential to the proper operation of tax collection, which is infinitely more important than the minor matters which could be covered by Clause 19 (5).
On the face of it, it looks like a major whittling away of the barrier of confidentiality which exists, not only for the protection of the taxpayer but for the protection of the Inland Revenue itself.
I come now to the four main provisions of the Bill, and I shall deal with them in an order slightly different from that taken by the Secretary of State. I am sure that he will understand that. First, I take the change in the mobility allowance. I think that the Secretary of State recognises that although Clause 12 represents a minor improvement, foreshadowed, as he said, a little while ago, it is exchanging one anomaly for another, in the sense that instead of the mobility allowance being lost on retirement—which is the anomaly he is seeking to correct—under the new proposal a person who would have qualified for a trike will be able to take mobility allowance into retirement, as against the person who does not qualify for a trike, who will not be able to take it into retirement.
I am tempted—the House will be glad to know that it is a temptation that I shall resist—to launch into a lengthy discussion of the whole question of mobility for the disabled. However, as the House knows, there is widespread concern and real alarm throughout the country among people who feel themselves threatened by the policy announced in the Secretary of State's statement on 23rd July. I should like nothing better than to be able to make all sorts of reassur-

ing noises from this Box, but I must not —I am sure my right hon. and hon. Friends will support me—fall into the trap that our predecessors on these Benches, now sitting on the Government Benches, fell into in arousing expectations, whether intentional or not, which they have not been able to satisfy. I recognise that much has been done with the introduction of the mobility allowance. More money is now being spent. But the Secretary of State does not need me to tell him that not only before 23rd July was there still much disappointment and that since 23rd July disappointment has turned to alarm.

Mr. Ennals: The right hon. Gentleman will accept, will he not, that the Government programme on mobility allowance increases public expenditure threefold and extends mobility to a far larger number of people than ever before? Is it his criticism that we should increase public expenditure rather further? How would he square that with the general view of his party?

Mr. Jenkin: I thought that I was making my position crystal clear. I was not doing that. It would be irresponsible and of no help whatever to the disabled to make promises and not be able to satisfy them. That sort of thing does this House no good at all.
Cash may be a more flexible and more easily administered mobility benefit, but if it is to replace the vehicle on which thousands of the most severely disabled have relied, the cash must offer a real alternative. One is now hearing of very distressing cases of youngsters newly disabled, perhaps in road accidents, having to stay dependent and housebound because the £5-a-week taxable allowance is simply not enough to enable proper mobility to be achieved.
I aroused some indignation on the Government Benches—I was aware that I should—when at Question Time a few weeks ago I described the Government's policy on a flat-rate mobility allowance as a policy of equal misery for all. But so it will be—unless there is cash enough to provide mobility for those who cannot achieve independence without it. That seems to me to be the point which Ministers have missed. Moreover, as I said in supplementary questions on 23rd July, the point is all the stronger if there


is no development of a suitable four-wheeled vehicle being carried out to replace the trike.
Mobility is an area where benefits once given cannot be taken away unless one is prepared to put in their place something of equal value—and I do not necessarily mean cash value—to the disabled person. If we cannot bring everyone up to the same level at once, I believe that a Government must be prepared and brave enough to discriminate. My top priority would be those who, without proper mobility cannot become self-supporting but who, if they have proper mobility, will be able to support themselves.
It is a good principle of the best social work that the aim should be to help people to help themselves. Could it not, therefore, be right to give enough help to those who really can help themselves even if we have to wait a little longer before we can match those benefits for those who are bound to remain substantially dependent whatever mobility help they receive?
I ask that as a question. I recognise that its implementation in practice would be difficult, although it is done in a way in the case of the war disabled. I have found a considerable measure of acceptance of it as a possible approach among the organisations for the disabled. In the meantime, as I said, cutting off at retirement was obviously a source of great bitterness and Clause 12 makes a small improvement. For me, however, mobility for disabled people must figure among the highest priorities for such resources as become available. My right hon. and hon. Friends and I will continue to study and consult with the organisations with a view to trying to find the best possible solution within the resources available.
I turn now to the question of students. While I quite understand the objections of the students' organisations—and I think I understand the objections of hon. Members on the Government Benches below the Gangway—I think that what the Government are doing is, in principle, right. The Secretary of State referred to the report of the Supplementary Benefits Commission, and I shall quote three short passages from paragraph 2.27 which seem to be clear beyond peradventure:
students now make heavy seasonal demands

—that is, on the commission—
which endanger the normal flow of benefits to families who may be in greater need…it should not be our responsibility to decide how much a student needs to live on…That job is better done by the education authorities, central and local.
I agree with Labour Members when they asked why there was no Minister here from the Department of Education and Science. Here is an important matter, affecting quite a number of people, for whom that Department is responsible. I can only imagine that it might have been a bit embarrassing to the right hon. Lady the Secretary of State to listen to some of the rest of the debate, but she might have sent one of her junior Ministers.
I hope that the Minister for Social Security will be able to tell us more about the so-called hardship scheme. I have the impression that the Government have not thought this through; legislation on this matter is premature when we do not know what is to replace entitlement to supplementary benefit.

Mr. Peter Walker: I agree with my right hon. Friend in principle that it is wrong to introduce legislation without having the hardship scheme available, but if one were to have this legislation should it not be done in conjunction with other legislation necessary for the hardship scheme?

Mr. Jenkin: I entirely agree. I said that I thought it right, in principle, to take the students out of the ambit of the Supplementary Benefits Commission, but I think that it would be helpful if the Minister could tell us a little more about the hardship scheme. Further, will he deal with handicapped students? I have had an anguished letter from the Bureau for Handicapped Students, which wants to be assured that the particular category of student which it represents will not suffer, because, as it says, there are extreme difficulties for handicapped students in getting vacation jobs.
I turn to the major proposals—the earnings rule and unemployment benefit for pensioners. The Secretary of State correctly stressed the public expenditure aspect of these two proposals. Indeed, he said that public expenditure was the central motive behind the Bill. Although the National Insurance Fund is in surplus and is a separate head of public


expenditure from the Consolidated Fund—it is really a notional fund, and does not exist except in so far as it is in surplus—I accept that one has to have regard to the cost of these measures when deciding what to do.
I believe—and the Treasury has done this every year—that the calculations on the earnings rule grossly exaggerate the cost of raising it from £35 to £50 a week. On the unemployment benefit issue, there are much better ways that do not offend the principle of the national insurance scheme. If the Secretary of State really believes that this cost will be incurred, perhaps he can pay for it by accepting the advice of the Chancellor of the Exchequer and tax short-term benefits, which the Chancellor believes to be right in equity.
I now turn to the earnings rule. It was a matter of great regret that the Chancellor of the Exchequer announced last February, that the Government proposed to reverse the decision which the House took, after full debate and by a clear majority, to raise the level of the earnings limit to £50 next April. The sole reason is cost.
There is no dispute between the two sides on the undesirability of the earnings rule as a permanent feature of our system. It has never been accepted by the public, and those of us who have had to defend it over the years have found it very difficult. It is a form of taxation which embodies almost everything that we find difficult to accept. It falls on the elderly and not the young. It is levied on earned income and not on other forms of income, and it is a severe disincentive to work. What may not be so well known is that it is bureaucratic. It must be costly to administer. If hon. Members doubt that, they might read a letter sent to an elderly lady living in the constituency of my hon. Friend the Member for Stratford-on-Avon (Mr. Maude) by the Department of Health and Social Security. The letter reads:
The Insurance Officer has considered the information given by you about your emoluments for the year ending 5th April 1976 and has decided that:—

Orders of the Day — INSURANCE OFFICER'S DECISION

Retirement pension is not reduced by earnings from 17th April 1975 to 14th

April 1976 (both dates included) because the claimant's weekly earnings for the assessment period 6th April 1975 to 5th April 1976 (both dates included) were £11·34.
The total amount of retirement pension payable from 17th April 1975 to 14th April 1976 (both dates included) is £379·80 comprising 31 weeks at £6·90 per week and 21 weeks at £7·90 per week.
I direct that £37980 paid to the claimant as interim payments from 17th April 1975 to 14th April 1976 (both dates included) is to be treated as having been made on account of retirement pension now awarded for this period. No balance is therefore due.

My hon. Friend concludes that no pensioner could be expected to understand that letter. It is an example of the bureaucratic way in which the earnings rule operates.

The sole question is cost. How much would it cost to pay the full pension to those who at present lose it if the earnings limit were raised to £50? What offset would there be from the higher tax yield on the pension so paid? The answer that we have been given is an extra £15 million. What would be the higher tax yield on increased earnings caused by the disincentive being removed? We have had no answer to that. What would be the additional tax yield if more people stayed on at work? How many people would prefer to build up a higher entitlement to pension by not drawing a pension for the first five years in order to obtain a pension which is one-third higher? The assumption is that nobody would do that. I do not accept that assumption.

The Treasury estimates are extremely volatile. In January 1975 the Government estimated that the cost would be £60 million in 1975-76. Later they amended that estimate to £50 million, and later still they admitted that a large part of that increase was due to the increasing number of pensioners retiring early because of the economic situation. The Treasury gave the cost of abolishing the earnings rule as £80 million in January 1975. In March 1976 the estimate was £60 million. £20 million mysteriously disappeared in the interim. Again, in 1975 the cost of raising the limit from £35 to £50 was given as £35 million. Since then pensions have been increased, and I agree that that will take the figure up to about £50 million. But the Bill provides for a figure of £60 million before


tax. Even odder is that before the Bill was published the sum was to have been £65 million, but £5 million disappeared in the last week before the Bill was published. How can anyone place any reliance on figures that are subject to such wild vagaries as this?

The Government estimates assume that an end to the earnings rule would mean the end of the retirement condition. That is not so. They are including the full cost of paying pensions to all who defer their retirement. I question that. A large number of pensioners would continue to defer their pension—because they might have to have it taxed at the full rate —in order to draw increments after five years. It cannot be right to assume that if the earnings rule is lifted all the people affected will immediately draw their pension and forgo their increments. That is an absurd assumption and is another weakness in the figures.

My hon. Friend the Member for Rushcliffe (Mr. Clarke) has been vigorous in pursuing the matter. Written Questions to him have shown that of all the people above retirement age with earnings within the earnings rule bracket, only about 3 per cent. had incomes above the earnings rule limit. Is it to be thought that none of those would increase their earnings if the disincentive of the earnings rule were lifted? Even if only one in eight of those within the earnings rule bracket increased their income by £15 a week, the extra tax yield from the change would amount to £16 million.

We contend that the Government's estimate of the cost after all their gyrations, cannot be relied upon. The Government's estimate is greatly inflated and has no credibility. Against that must be set all the social arguments. If the Government can convince me that £60 million or even £45 million is right, then it is right for us to look carefully at the whole question. If not, it is right to stick to the decision which the House took last year.

No such qualifications need to be made about Clause 4—and I come now to the most contentious part of the Bill. Successive Governments have put this proposal to successive Parliaments and successive Parliaments have thrown it out. Ending entitlement to unemployment benefit for occupational pensioners is a breach of the national insurance principle

that benefits are enjoyable as of right. That point is made very clearly by the Council of Post Office Unions:
The Government appears to he proposing to depart from what was held to be a fundamental principle of the post-war reconstruction of the social security system.
I agree. The proposal introduces a new means test where there ought to be none. As the CBI has said,
this will open the door to extension to other forms of benefit.
That is a real fear. It will discriminate against the man with an occupational pension but not the man with other forms of income. That is a point very well made by the Life Offices' Association, which has said,
it is hardly consistent with the Government's policy of encouraging the development of good occupational pension schemes.

It will be open to abuse, as a number of correspondents make clear. People will go for commutation payments, postpone occupational pensions, and vary the rate below the limit in the first year and above the limit afterwards. However, as The Times said on 17th August,
legislation to penalise genuine and bogus seekers for work indiscriminately is unfair and unnecessary, when administrative arrange? ments already exist (capable of reinforcement if required) to discriminate between them.

I hope to be able to satisfy Labour Members that they are on a good wicket in joining us in throwing out the clause. Last week I conceded that there was abuse of the system if someone who has no genuine intention of taking work signs on and draws benefit. There is no conflict between us on that matter. Such a person is not genuinely in the market for employment.

The right hon. Member for Hertford and Stevenage (Mrs. Williams)—now Secretary of State for Education and Science—said in Standing Committee G on 25th May, 1971:
if the Government want to deal with abuse —and there may be some abuse—it seems odd to go about it by trying to change National Insurance entitlement, instead of by taking the obvious step of ensuring that the Department of Employment makes certain that anyone who lists himself for employment and is retired on an occupational pension sincerely means to list himself for employment"— [Official Report, Standing Committee G, 25th May 1971; c. 167.]
As The Times said, if the rules are not adequate they should be tightened up.

Mr. Rooker: So far this afternoon we have had the unedifying spectacle of both Front Benches standing on their heads and their feet at different times. Will the right hon. Gentleman assure us, from the Opposition Front Bench, that if the situation ever arose—God forbid!—in which Conservative Members were to form the Government, they would stick to what they are saying today? Both Front Benches have chopped and changed. Let us get it clear on the record now what is to happen in the future.

Mr. Jenkin: Though I have not been long in politics, I have been in politics long enough to know that "never" is a very dangerous word indeed. However, I will say this: the proposal having been introduced three times and thrown out three times, I think that it would be a very unwise Minister who sought to introduce it again.

Mr. Ennals: As one Member who has been either constantly wrong or constantly right, but at least constant, because I have taken the same position when in Government previously and I was not in Parliament when the Labour Party was in opposition, perhaps I may say that if the right hon. Gentleman wants to do some quoting across the Floor of the House, he should note what his hon. Friend the Member for Somerset, North (Mr. Dean) said on Second Reading of the 1971 Bill. He said,
I assure the House we have looked with the greatest care to see whether it would be possible to deal with this misuse of benefit by redefining that test.
That is the employability test.
The National Insurance Advisory Committee has looked at this matter with extreme care but has reached the conclusion that it would not be possible to deal with the situation in that way."—[Official Report, 3rd May 1971; Vol. 816, c. 1088.]

Mr. Jenkin: We have now had our quotations across the House. We shall return to the comments of the right hon. Member for Hertford and Stevenage, because on this she has said many wise things.
There was one proposal, which the Government could have dealt with, that was recommended by the NIAC. However, it has not been put into practice. That is to redefine "usual occupation".
Paragraph 40 of the 1968 report, to which the right hon. Gentleman referred, says that the rules should
be amended to state expressly that a person who has retired with an occupational pension should be regarded as having severed his connection with that employment and should be treated as not having a 'usual occupation
As the Committee explained,
We consider that the concept of a 'usual occupation' is inappropriate when considering both the availability of an occupational pensioner and the suitability of employment for him and we think that the questions of availability and suitable employment should be determined without regard to the occupation from which he has retired on pension.
Why cannot that be done? That would greatly widen the scope of employment which would be available for those who chose to sign on and are seeking employment.
The matter goes wider than this. Perhaps here I shall move a little into the realms of speculation, and what I say should not necessarily be taken as clear policy. I believe that we need to take a new look at the availability for work rule as a whole, not merely for occupational pensioners but generally. There is a growing feeling in the country that the rule is not applied firmly enough and that the range of jobs for which a man should be expected to offer himself is unduly restricted. Of course, a man unemployed should have time to find something suited to his abilities and qualifications. However, this can lead—there is evidence that it does—to people turning down jobs which, in all reason, the community might reasonably expect them to take up.
I have seen figures to suggest that despite the very large increase in unemployment over the last two years, the ratio of jobs accepted to jobs offered in one large engineering group has actually fallen by quite a significant amount in the last two years. Part of the explanation might be that the rule is not being properly applied. I realise that one needs to put one's survey wider, and we are trying to do that.
What can be done? I point to what is being done in Australia. In Australia the Minister who is responsible for this area of policy, the hon. Tony Street. Member of Parliament, in both January and March announced a number of measures which would materially accelerate the


time by which a man is expected to take a job, albeit not exactly what he is looking for, or otherwise lose benefit. We ought to examine those matters. My right hon. and hon. Friends are examining them to see whether some of them would be applicable here. Of course, they are not all applicable. The situation is not on all fours. The two countries are different.
However, there are some things that would be applicable. For instance, a man who moves away to an area in which he knows or ought to know that there is no prospect of getting a job of the sort that lie wants should not he able to go on drawing unemployment benefit. That would cover many retired people. One always takes the example of a retired bank manager, but there are plenty of others who go to the seaside, where they know that there is no prospect of a job, and sign on for employment.
Always this must be a matter of balance—of balancing fairness to the individual who is seeking employment which is congenial and rewarding and fairness to the community, which has to pick up the tab while he is looking for a job. Successive Governments have said that it is not possible to shift the balance. All I can say is that other countries have shown that it is possible. We must put the matter right, and this is the best way of dealing with the problem of abuse in this field, with which both sides of the House are concerned.
Concerning Clause 4, we believe that the general approach of tightening the availability for work rule is a much fairer way and much more in accordance with principle than the blanket disqualification in the clause. That was the view of the right hon. Member for Hertford and Stevenage. That is the view of the CBI and the TUC. It is the view of th. pension organisations, and it is the view of the many thousands of ordinary people who have written to right hon. and hon. Members in all parts of the House, urging us to throw out the clause. It is a view which in Committee and, if necessary, on Report, we shall press upon the Government in the hope and expectation that the Committee or the House will follow precedent and reject the clause.

Mr. Deputy Speaker: I remind hon. Members that Mr. Speaker has selected

the amendment standing in the names of Liberal Members.

5.40 p.m.

Mr. Cyril Smith: I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:
this House declines to give a Second Reading to a Bill that proposes to make small savings in public expenditure at the expense of increased hardship for an already disadvantaged section of society".
In moving the Second Reading of the Bill the Secretary of State described it as a tidying-up Bill. I would describe it as a silly, ill-conceived Bill. Certain parts of it are good but there are parts of it which are very bad. That is an admirable reason for putting down a reasoned amendment to the Second Reading. It is the sort of cause for reasoned amendments being accepted. Therefore, I find it strange that the Conservative Front Bench advised Conservative Members to abstain from supporting the reasoned Liberal amendment.
I listened carefully to what the right hon. Member for Wanstead and Woodford (Mr. Jenkin) said about the Conservative attitude to the amendment. He argued that his hon. Friends should let the Bill through and then amend it in Committee. The truth is that there are not enough Tories present to make a reasonable vote against the Bill. Their attitude is that they have been here for three days and that is enough. I agree with them, but that is another matter. That is why they are not voting tonight. However, I hope that those Tories who arc present will rebel against the Conservative Front Bench and against the advice of the Tory Whips.
The right hon. Member for Wanstead and Woodford said that the Conservative Party would seek to delete Clause 4 in Committee. How does he know that he will carry such an amendment in Committee? The right hon. Gentleman and his colleagues could delete the clause tonight if they were here to vote. Make no mistake, experience has conclusively proved that any hon. Members of the party which is in Government—it applies equally to Tory Governments—who speak against a Bill on Second Reading do not have a cat in hell's chance of getting on the Committee.
The Government will argue that these matters are arranged by the Committee of Selection. That is not true. The party Whips slip notes to that Committee and make sure that the people they want on the Committee are put on.

Mr. Ennals: That applies to the other side of the House.

Mr. Smith: The Minister says this applies to this side and not to his side of the House. Several hon. Members on his own Benches have made that point in the last three months about other Bills. That is the truth, and the Minister knows it. I understand that some Government supporters are prepared to rebel by voting for the Liberal amendment. I give them credit for that. But it is a fallacy for the right hon. Member for Wan-stead and Woodford to believe that those same people will have the opportunity of being represented, and voting with him, in Committee. That will not happen.
The only hope that the right hon. Gentleman has of defeating Clause 4 is possibly on Report. We shall see, but my own view is that the Tories should have taken the opportunity to vote tonight.
The right hon. Gentleman asked what the Liberals would say to the disabled. I shall tell him what we shall say to those on occupational pensions and to those thousands of students who have joined the Tory Right Wing movement in the universities in the last six months. We shall tell them that the Tories had an opportunity to defeat the Bill but that they did not take it.
I telephoned Cambridge at lunchtime and urged the Liberal candidate to put a leaflet out to the students of Cambridge this afternoon telling them how the Tories in this House were supporting us on this Bill. [AN HON MEMBER: "You will need more than that."] We may need more than that, but at least the students, even though they may be voting blindly for the Tories, will have had their eyes opened before they vote in that way.
The Bill is bad in three parts. That is why the Liberal Party tabled the reasoned amendment. The first relates to Clause 4, which imposes a means test on social security benefits. As the hon. Member for Conway (Mr. Roberts) pointed out,

it has not only been sections of the trade union movement which have made representations about this to hon. Members. The Secretary of State himself, who said this applies only to those who are not in the poverty trap, received a letter on 30th November from the Child Poverty Action Group which said that it was opposed to the plan to means test unemployment benefit for occupational pensions. I would not describe that group as being the champion of the most affluent members of our society. It is a fallacy to suggest that Clause 4 deals only with the better-off.
There are two other clauses to which we in the Liberal Party take exception.

Mr. Ennals: The hon. Gentleman talked about increased hardship for an already disadvantaged section of society. Does he dispute the figures that I have given? Is he saying that it will not mean that people will still be able to get between £50 and £60 a week?

Mr. Smith: I dispute that figure. If the Minister will wait until I deploy my case I shall deal with his point.

Mr. Ennals: I am spellbound.

Mr. Smith: The Minister is spellbound by many things, in my experience.
We also object to Clause 5 and Clause 13. Those clauses, with Clause 4, and the consequential clauses which may stem from them,
make small savings in public expenditure at the expense of increased hardship for an already disadvantaged section of society.
I gather that most of the explanations will be given later by the Minister of State. The Secretary of State said constantly that his right hon. Friend would deal with these points at the end of the debate. It rather reminded me of the story of the old council chief officers who always wore frowns on the faces of their deputies.
We may get the explanations tonight, but if I know the Minister for Social Security I suspect that his heart is not in many parts of the Bill.
Let us consider the three clauses to which I have referred. First, there is the clause dealing with occupational pensioners and the proposal to reduce the unemployment benefit to occupational


pensioners. The seriousness of that proposal is that it applies a means test to a national insurance benefit. That is the central principle behind the clause. It is the principle behind the clause to which we are objecting.
The central principle behind the claim for insurance benefits is that, provided a claim satisfies the conditions and the criteria laid down, a person who is genuinely seeking work is perfectly entitled to draw unemployment pay regardless of his financial situation. Clause 4 undermines that principle.
If the Government are concerned about stopping people drawing unemployment pay who ought not to be in receipt of it because they are not genuinely seeking employment, there are other ways of stopping them without means-testing the benefit. The other disadvantage of the proposal is that it will penalise only one section of the community. I cannot believe that is fair.
If I put my money into private savings, or bonds of some sort, or even shares in a company, and I receive a vast amount of interest from those shares which exceeds not £25 a week but £100 a week I can still retire at the age of, say, 61 and draw 12 months' unemployment pay, assuming that I am available for work. But if I put my money into a pension scheme, and receive the benefit of that investment in the form of a pension, I am penalised. I do not believe that is fair or just. I do not believe that it can be justified as being fair play. That is another objection to this clause, and it is a major one.
The clause also discriminates against men as opposed to women. A woman can draw an occupational pension at the age of 60 and retirement pension at 60, whereas a man has to wait until he is 65. It means that a woman can claim both a retirement pension and an occupational pension. There, too, is an anomaly. But the biggest discrimination is between those who have their incomes from occupational pensions and those who have them from other sources.
Public sector employees will feel much of the effect. As the Secretary of State said, representations have been made by Post Office workers who are totally opposed to the Bill. But there are many other sections of the community

who oppose it. In my constituency I have the largest asbestos factory in the country. It employs 6,000 people. The company deliberately, for industrial health reasons, retires people before the age of 65 on occupational pensions. Those manual workers employed in asbestos who are retired early in order to prevent the contraction of such diseases as pneumoconiosis do not receive vast pensions, but they are sufficiently large to be affected by the clause. Many of my constituents will be adversely affected by the introduction of Clause 4.
Whether people receive £50 or £60 a week, the fact remains that pensions and occupational pensions are subject to taxation, whereas unemployment benefits are not. It means, therefore, that the source of a person's money is applicable to the amount of hardship that he suffers as a result of the taxation of benefits. That is now to be added to by taking away the opportunity for unemployment benefit, again not on the basis of what is earned so much as on the basis of where it is earned. That is quite wrong, in my view.
I turn now to Clause 5, which is the part of the Bill concerned with the earnings limit for pensioners reducing from the proposed £50 to £35 from April 1977. I think that sufficient has already been said by the right hon. Member for Wan-stead and Woodford without the need for me to flog this case. The fact is that this House made a decision by a good majority, and I think that there are times when the Government should accept the opinion, the view and the vote of this House. I find it quite objectionable that, when the House has expressed itself clearly on a matter of this kind, not by votes from one side only but on an all-party basis, bearing in mind that it was based on an amendment moved by a Government supporter who was successful in carrying a majority with him, it is quite wrong now for the Government to attempt to alter it.
In any event, the decision made then was right, in my view, in that a person should not be penalised for going out to work—indeed, encouraged not to work. Very often, for elderly people the opportunity to earn is the opportunity to feel independent. This is not only a financial argument. It is a social and a psychological argument.
In my view, the Government are very ill-advised to take this line for the sake of the puny difference that it will make in financial terms compared with the country's overall plight. We have to bear in mind that here we are discussing £45 million against a borrowing requirement of £12,000 million. If the Government are looking for ways of saving £45 million, I am sure that other ways can be found.

Mr. Ennals: indicated dissent.

Mr. Cyril Smith: The Secretary of State does not agree, apparently. I accept that the other ways of which I speak may not be within his portfolio, but I have in mind extravagances like some of our embassies abroad and the lavishness of them. The Government will have to abolish a great deal of that kind of extravagance before they convince me that our old-age pensioners must be penalised in this way.
I come next to Clause 13 on which, apparently, I disagree with the Conservative Front Bench. The right hon. Member for Wanstead and Woodford said that the Opposition felt that the Government were correct. They are now on record as saying that they agree with Government policy in relation to students' allowances. That is what the right hon. Member for Wanstead and Woodford said today. I wish that I had known that when I telephoned Cambridge, because it would have made an even better leaflet.
If we are to alter the opportunities of students to earn in vacations and the conditions in which the finance is available to students so that they can live properly, we should alter the whole basis in one package and not have a go at them through one Bill and give them no opportunity to adjust their position through another.
When students go to work at Christmas and Easter, which are the two principal vacations about which we are speaking, it is not simply because they want to go out and earn. It is because they have to. Their allowances are such that they need to do it.
It is also a statement of fact that 72 per cent. of students do not receive full parental contributions to their grants. It

may be argued that that is the fault of parents in that they do not pay them. But that does not alter the fact that they do not. Often parents are not able to pay them. In any event, it is a little immoral to require people of voting age to depend on their parents to supplement their incomes in that way.
I am not sure what lies behind the Government's thinking in this clause. It could be that they think students are the easiest lot to take on. However, the financial position of students in terms of the purchasing power of their grants has declined considerably since 1962. I have the figures here for each year from 1962. However, I shall not bother the House with all of them.
In 1962, taking the Retail Price Index at 100, the maximum grant was £320. In 1975 that index stood at 267·2, and the grant had increased to £740. The average income of students was £577 per annum on the basis of a recent survey done by the DES. The full grant was £605. There was a greater incidence of means-tested grants amongst university students. The average vacation income was 92 per cent. from vacation employment and only 7 per cent. from supplementary benefit. Men students earned substantially more than women during the vacation. Only 47 per cent. of students received £400 or more in grants. Of the students receiving means-tested grants, 73 per cent. did not receive their full parental contribution and, of these, 48 per cent. had a deficit of more than £50. Students living in university halls of residence spent 18 per cent. more on board and lodging than the notional element of their grant.
Although the new regulations allow the right of appeal and, therefore, the opportunity for specific financial responsibilities to be met—rent to pay, dependants to support, disability, one-parent families, and so on—the £11·35 notional vacation element will be deducted. It should be noted also that the vacation element is means-tested and thus is not received by 73 per cent. of students.
The bulk of student vacation income comes from casual employment in the vacation. The grant was originally set on the basis that the short vacations should be largely available for study—for example, the Easter vacation before the summer exams is especially important


in this respect—with income being supplemented only from employment in the summer.
Of course, most students seek work during both the short vacations, although at a time of high unemployment the proportion of them who are successful in gaining employment has dropped considerably. For example, up to five years ago the Post Office used to employ thousands of people in casual jobs for the Christmas post, but now there is very little vacation employment. Students themselves recognise that employment opportunities should go to unemployed school leavers and young people who are not training for a career. If one both takes away opportunities for work and accepts that the level of student grants has dropped in proportion to the cost of living surely it is unreasonable to remove students' opportunities to receive supplementary benefit during the vacation.
We are opposed to the three clauses to which I have referred. If the Government were to be defeated on our reasoned amendment this evening—as they certainly would be if the Tories were here in numbers—there would be nothing at all, as the hon. Member for Bethnal Green and Bow (Mr. Mikardo) said, to prevent the Government bringing in a new Bill without these clauses and putting it through on the nod within weeks. Such a Bill could go through the House without a great deal of opposition and effort. [Interruption.] An hon. Member behind me comments from a sedentary position "Not in this Session". I do not believe that. It could go through.
We are in only the second week of this Session, yet we are already forecasting what Bills we can get through by the end of July or the first week in August next year. I never heard such rubbish in all my life. Of course the Government can put through a Bill in this Session if they want to do so, whether on this or on any other matter. As the Bill, without the clauses to which I have referred, would have been non-contentious the Government could easily have got it through. The Government are ill-advised to bring in this Bill now. The savings are comparatively puny. In any case, they are being taken from the wrong section of society.
It is for those reasons that my party tabled the reasoned amendment. We

shall be delighted to have the more enlightened hon. Members who sit on the Treasury Bench voting with us tonight. Regretfully, we shall not have with us all hon. Members of the official Opposition, although I gather that some hon. Members will rebel against the Whip. I am delighted to hear that. The Government may rest assured that if our amendment is not carried this evening we shall return to this matter later to try to persuade them, or, if necessary, to force them, to change their mind.

6.4 p.m.

Mr. William Molloy: If this Bill did not include two very controversial clauses, my right hon. Friend the Secretary of State for Social Services could be charged with being over-modest in claiming that this was merely a tidying-up measure. The clause that deals with those unfortunate industrial workers who suffer from pneumoconiosis and byssinosis, and with mobility allowances. is very welcome. The only criticism that we could make of the clause is that it does not do enough, but we always say that about every social security measure. It is a bitter experience, which successive Ministers undergo whenever they introduce some brand-new relief for people who have never had any help that they are immediately charged with not doing enough.
I think that the Secretary of State, his predecessor, this Government and the previous Labour Government have done more for the disabled, the chronically sick and the unfortunate in our society than any previous Administration, with the possible exception of the remarkable Labour Government of 1945-50, who did so much when the world economic situation was completely shattered. If they had suffered from the weak and frightened attitude that exists on both Front Benches today, we should never have seen the first National Insurance Bill, and we certainly should not have seen the establishment of the National Health Service.
We need to put back into the House of Commons the sort of courage that existed then. We should not be frightened and scared out of our wits by the announcements of a few bankers and by economic analyses made by a few people who have never faced greater danger in


their lives than that of being impaled by their own fountain pens.
The Parliamentary Labour Party Social Security Group of which I have the honour to be chairman, has examined the Bill Two clauses concerned us and made us bitter and extremely annoyed because they should not have been included. The more we examined the Bill, the more we came to the conclusion that there was no need for Clauses 4 and 13. Any Minister in this Labour Cabinet who is incapable of finding the sum saved through these clauses from some other source that could better afford it has no right to sit on the Front Bench. Hon. Members who are members of the Social Security Group will demonstrate later in the debate how this could be done.
We all acknowledge and understand that the National Insurance Advisory Committee is a very worthwhile body. But the House of Commons cannot accept that any reports from a Royal Commission or advisory committee should be regarded as tablets brought down from Mount Sinai. Simply because issues have been examined by an outside body, it does not follow that the findings of that body are absolutely true.
It would have been much more to the point for my right hon. Friend the Secretary of State to have discussed this clause with those who have a closer understanding of its effect, such as trade union leaders, who are now extremely bitter because some people will suffer. I know that my right hon. Friend the Minister for Social Security, who will reply to the debate tonight, has a massive industrial understanding. He knows that the people who will be affected by this clause are those who accepted the social contract. I asked him to bear that in mind.
Trade union leaders are extremely angry, bitter and annoyed because the agreements made over the years were entered into on the understanding that the sort of issues that we have in Clause 4 of this Bill would never be raised. Trade union members are also upset.
The last time such a clause was introduced in a Bill—by a Tory Government —it was totally demolished by my right hon. Friend the Secretary of State for Education. How can it now be said that the circumstances that affected the prin-

ciples of our argument then do not exist today? I should like to hear what those circumstances are. What my right hon. Friend had to say in Committee demolished the original clause. Her arguments are equally applicable now. I should like my right hon. Friend the Minister for Social Security to explain that.
My hon. Friends and I are closely associated with social security measures. We make it our business to understand what is going on. We have examined the case. We have met trade union leaders and members of the TUC. Possibly we are more annoyed and bitter about this proposal than anyone else.

Mr. Shersby: I hope that the hon. Gentleman is not suggesting that Labour Members are the only ones who have met trade unionists to discuss this problem. I can assure him that I, too, have met union leaders. I am sure that many of my hon. Friends have done so.

Mr. Molloy: I have no doubt that if the hon. Member catches your eye, Mr. Deputy Speaker, he will be able to make that point. I trust that in future, if there is any threat to the trade union movement, as there was a few years ago from the Tory Party, we shall be able to count on the hon. Member's support—if he is still here.
My hon. Friends and I are particularly angry about Clause 4, which deals with unemployment benefit for occupational pensioners. The clause is a complete abomination and constitutes an unjust penalty on those who have made a lifetime's contribution to society. It will apply particularly to the public service and mainly to Post Office workers. Since 1969, when the Post Office became a public corporation, members of the Post Office Engineering Union and the Union of Post Office Workers and others have been obliged by their contracts to retire at 60. Now all of these agreements, which were underwritten by one Department of State and embodied in a massive contract, are being undermined by another Department of State. That is the en-credible situation the Government are in today.
These workers entered into a contract honestly and decently. The Government now seek to ravage that contract. My


Social Security Group has spoken to people such as the General Secretary of the Post Office Engineering Union, Mr. Brian Stanley, Mr. Stagg, the Deputy General Secretary of the Union of Post Office Workers, and Mr. Carter, Secretary of the Council of Post Office Unions. All of them, without exception, complained bitterly about the inclusion of Clause 4 and about the fact that they were never consulted. I confirmed that point only yesterday.
I must ask my right hon. Friend for certain assurances. The members of these unions are asking "Why is it that on the great issue of the social contract the Labour Government come to us and ask for our assistance, our patience and co-operation, yet when it suits their purpose they completely ignore us and then stab us in the back?" This is the feeling of ordinary postal workers in all of the unions I have mentioned.
It is plain that these pensions were meant to be a form of deferred wages. The workers could have invested a proportion of their wages and would not now be trapped by this proposal. They realise that. Hence, they are extremely bitter and believe that there is a danger of the Government—as they say, "our Government"—double-crossing them. This is the sort of thing which I am sure my right hon. Friend will consider.
I have also had the privilege of discussing this matter with the General Secretary of the Confederation of Health Service Employees, Mr. Albert Spanswick. He was particularly concerned about how this measure might affect those brave men and women who work in our mental asylums. Only yesterday there were tributes paid to the nurses and others who work in such hospitals in dangerous circumstances. Today there is a danger of those tributes turning into sour grapes.
If the House were to accept Clause 4, it would be behaving in a dishonourable manner. A contract exists for the occupational pensioners, based on an established principle. While I do not have the time to go into the detail, there is no doubt that Clause 4 ravages that principle. I say to my right hon. Friend the Minister for Social Security, who has a massive understanding of this subject, that occupational pensions are always taken into consideration in wage and

salary negotiations. He will understand the import of that.
Clause 4 could bust the social contract. It is as serious as that. It will certainly endanger the chances of success of the appeal the Prime Minister made a few days ago to the trade union movement. The hon. Member for Rochdale (Mr. Smith) and the right hon. Member for Wanstead and Woodford (Mr. Jenkin) made the point that abuse of occupational pension schemes by people drawing benefits without any intention of obtaining employment should be stopped. We believe that that is not an insuperable problem. It could be tackled by the employment offices, without withholding benefit from those who genuinely qualify.
Taking all of these things into consideration, I must ask my right hon. Friend to consider giving us the assurance that in Committee there will be full consultation with the trade union leaders, particularly those I have mentioned—not formal exchanges of letters but a deep examination of the issue. I ask my right hon. Friend to be prepared to see the evidence that can be provided. We say that Clause 4 has to be removed.

Mr. Orme: I will not reply to my hon. Friend now because he has asked me an important question to which I know he and my hon. Friends will want a full answer. I will deal with it when I reply to the debate.

Mr. Molloy: In our opinion, Clause 13 is unjustifiable because it discriminates. Clause 4 is a total abomination which ought to be removed before the debate concludes tonight. That may not be possible. I ask my right hon. Friend to be prepared to see the people I have mentioned and to receive representations from my hon. Friends who have knowledge and understanding of this issue. Let me make it transparently clear that we are not talking about tinkering with Clause 4. We are saying that we believe that we have the evidence and all that is necessary to assist my right hon. Friend to remove this abominable clause from the Bill completely.

6.10 p.m.

Mr. Robert Boscawen: Like many other hon. Members who have already spoken, and no doubt others who will speak later, I regard this as a miserable little Bill. But for the fact that


Governments were not born yesterday—they put a number of measures in a Bill of which we are bound to approve—I should have liked to see it thrown out lock, stock and barrel.
I regard this as a missed opportunity. As happens with so many social security measures put forward by the Government, massive promises are made at election time, and the cost of measures is either deferred to the next generation or efforts are made to claw it back in various ways. That is what is happening in this Bill. The Government are here clawing back some of the cost of the promises they made so freely at election time.
With regard to Clause 4, dealing with adjustment of benefit. I was one of the five Tory Members who did not vote with the Conservative Government in 1971, and that is why the measure was not put on the statute book. I am no more enamoured of it now than I was then. At that time I was moved by the speech made by the then hon. Member for Hitchin who is now Secretary of State for Education and Science. She made an excellent speech in Committee, putting all the pertinent points about the social effect of bringing in the measure. She showed that it was against a basic principle behind the whole concept of social security.
If I were to be selected to serve on the Committee dealing with the Bill, I should certainly not support it. In order to clobber a few people who are abusing the system, the Bill will be attacking a considerable number of other people who have contributed and who have a right to expect benefits for their contributions, irrespective of their level of income.
It is no good suggesting, as the Secretary of State sought to do, that some of the people affected may be better off than others. That is not the point. It is not his job, with respect. It is the job of the Chancellor of the Exchequer to even out levels of income through the taxation system. It is not right to seek to do it through the social security system.
In this respect the Bill is a retrograde step. On three occasions the House in its wisdom has shown that it did not want the measure to be introduced in this way. We ought to try to find other ways of

curing the abuse. Taxing unemployment benefit is one way. There is also the question of availability of work and tightening up on conditions relating thereto. These methods must be applied to those who seek to abuse this aspect of the service. But it is quite wrong to try to breach the principle, and I shall vote against it for that reason.
The Bill does nothing to help in regard to contributions towards retirement made by a person who gives up work after 60 years of age. Under the Bill produced by the Conservative Government there was at least to be a contribution option available for those who could not draw unemployment benefit over 60. It is because they cannot really see why they should continue to pay the contribution after 60 when they have not any work of cannot find any work that they seek the unemployment benefit.
If the Government want to push ahead really seriously with the measure, they should look at this proposal put forward by my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) on the question of contributions. But one senses from the feeling of the House that the measure will not get very far.
With regard to the earnings rule, I am very glad to see the hon. Member for Islington, South and Finsbury (Mr. Cunningham) in his seat, because it is due to his courage and consistency that the earnings rule was tapered in the way it has been over the past three years. But for the obstacle placed now in the way of this particular advance, we should be seeing the death penalty placed on the earnings rule by 1980.
I admit that there was a good deal of cross-pollination of ideas in Committee on the previous measure in an effort to cobble together a series of amendments and produce one answer which would at least start the phasing out of the earnings rule. The whole House wanted to see this happen at that time, and it is a great pity to try to prevent it because it may cost a little more.
The cost figures put forward by the Government are very suspect indeed. How much will come back due to the fact that not all the people who continue to work after retirement draw their retirement benefit because they want to enjoy


the advantage of a higher benefit in the end? That aspect has never been taken into account by those who argue against abolishing the earnings rule.
Consideration ought to be given to the great psychological effect of allowing people to continue in work after they retire and to keep their earnings in the way that anyone else can. Surely that psychological effect can be measured in terms of cost when we consider the health and mental stability of people after retirement. Many people when they have to stop work suffer a very rapid deterioration in health because of the change of pattern in their lives. Where people have the opportunity and wish to keep on working, it is good to allow them to do so.
This aspect has been totally disregarded by successive Governments and by those who advise them, who continually say that it will cost a great deal of money and that it cannot be done. Fortunately, thanks to hon. Members on both sides of the House, we have started on the road of getting rid of what I regard as an odious rule. I hope that we shall continue on that road by throwing out the clause.
Having dealt with the bad part of the Bill, may I say that I regard Clause 12 as a slight improvement, but it has a long way to go yet. I accept absolutely that the principle of the mobility allowance is the right way forward—cash instead of hardware. But I feel that there was a grave misunderstanding—which still exists—among those who have the hardware, the invalid vehicles, and who feel that they may lose it all and get nothing in its place.
We must work steadily towards a position where the cash available in terms of mobility allowance is sufficient to enable a vehicle to be purchased where it is needed. If there has to be a priority, it should be that when funds are available they should go to those who need a vehicle for the purpose of getting to work. It will be some time before the mobility allowance can cover the cost of replacement of an invalid vehicle, but we must move forward on this front as and when there is available cash, and make it a priority. It was a valuable move that the Government have made in spreading the mobility allowance over

a much wider field of disabled people than those who received a vehicle so far because they could drive. However, we must move ahead as soon as we can.
I hope that we have a good debate in Committee on the question of the anomalies of the mobility allowance. They must be aired in the House so that people outside will recognise that we understand their worries about this allowance.
Lastly, on Clause 13, it is right for the Government to introduce some restriction on supplementary benefit payments to students. After all, students are doing pretty well as a whole out of the State, in contrast to the many people who have not had the benefit of the education that these students are able to have. Students may not agree with this statement, but taking the total of what the State gives students in grants together with the whole cost of their higher education, students draw from the State something which is not available to a very large number of others, because of their inability to qualify for it.

Mr. Cyril Smith: Do I gather that the Conservative argument about education now is that they regard State-aided education not as an investment but as a charity given to those who are to be regarded as sucking benefits from the. State rather than that the State gets something from them?

Mr. Boscawen: Higher education in Britain is a privilege that we are able to provide for an ever-widening number of people. I believe that those who are able to benefit from it repay the State overwhelmingly by putting to good use what they have learned during their years of training, thus paying back, so to speak, the benefits they have gained and, in addition giving of their brainpower and skill. This is the right way to look at it. But no one can say that there has not been a good deal of abuse by some students over the past few years. In some few cases it has been a scandal. The Government are doing the right thing in tightening up the benefits in some respects.
If the Government really want to move forward in social security, it is high time that they sought to straighten out the whole question of child benefits. If they really want to bring in a Social Security


(Miscellaneous Provisions) Bill, this is an area which they must look at. It is in a muddle. Single parents do not know where they are. They have been promised benefit with one hand, but their money is clawed back with another hand. At an early date we must have a Bill implementing the child endowment scheme, or whatever it is to be called, and full benefits must be introduced, particularly for single parents.
The Bill is extremely bad in several parts. It is minimally good in some parts. I hope that in Committee we shall be able to throw out those particularly bad clauses.

6.34 p.m.

Mr. George Cunningham: A Second Reading is properly intended for the discussion of the principle of a Bill rather than the details. However, in the case of a miscellaneous provisions Bill of this type I suppose that it can be said, quite apart from one's feelings about the content of the Bill, that there is no principle involved. I want to avoid going over every clause in which I am interested. I shall make comments only upon the two clauses with which I am most concerned.
I want to comment first on Clause 5, which seeks to alter the earnings rule. I do not take back a word of what I said about 18 months ago in Committee and on Report, when we passed the amendment which had been tabled by the hon. Member for Kensington (Sir B. Rhys Williams) to the Social Security Benefits Bill and succeeded in phasing out the earnings rule threshold.
I regret that what we are doing now is to undo that measure to some extent. Up to this point in time the responsibility for putting forward that proposal belongs to the Government and not to the House, but I propose to vote for it and I am prepared to take on the responsibility, therefore, of sharing in the undoing of part of what was done last year, simply on these two grounds. First, the economic situation, though bad last year, is certainly worse this year, and savings which were marginally not worth while last year are marginally worth while this year. Secondly, what is involved in substituting the content of Clause 5 for what is already on the statute book is that we lose the

£50 which the threshold would have gone up to next April under present legislation and instead substitute a lower figure which, however, is indexed.
The Minister is entitled to say that is a quid pro quo there. We know that in present circumstances if the figure had risen to £50 next April it would have been a considerable time before any Government would have felt able to propose a further relaxation, whereas under the arrangement proposed by my right hon. Friend the £38, perhaps, or £39, which will come into force in November 1977, will move up and will probably reach the £50 level without too much delay and will then automatically go on up above that. It is a choice. I say only that it is a choice which with some regret I am prepared to go along with the Government in making.
I particularly welcome the statement by the Secretary of State at the opening of the debate that the Government stand by the assurance given at the end of the Report stage in January 1975, that they continue to be committed to the bringing up of the threshold to the point of abolition of the rule. That was a very useful statement to get on the record.
The Secretary of State seemed slightly to take credit for the figure of £35 as it will exist in an indexed form. He suggested that that figure seemed to him to be about right for the purpose. It is worth recalling, on Clause 4, that it was not the Government who adopted the figure of £35 in the first place; it was forced upon them with great bitterness and great protest by a majority of the House. I have no doubt that when we, as we surely shall, defeat Clause 4 on a Division not many months later, credit will be taken by what ever Government are in power for the fact that there is nothing on the statute book limiting unemployment pay for people with occupational pensions. That is the way Front Benches invariably behave, and it is up to those on the Back Benches to keep them on the right lines. They will take credit for what we do in Committee or on Report.
Clause 4 proposes to restrict the payment of unemployment pay in certain circumstances. The Government make no bones about the fact that the only reason for bringing forward this proposal is to achieve some modest savings—estimated


at £14 million—at a time of severe financial difficulty. If that is the reason, I find it odd that they are not proposing a temporary change only. They seem to be suggesting that this restriction will become a permanent feature of our social security system.
They are suggesting, for example, that the £25 for the threshold should be an indexed figure. Once it is indexed, we know that it will be extremely difficult to remove that restriction from the statute book. If they thought that they had to find £14 million for the next few years, surely they would bring this in as a temporary proposal and say that it would be dropped later. Surely it cannot be denied that the proposal is a breach of the national insurance principle.
In the discussions about the social security system generally over the past few weeks there has been a tendency to confuse the principles that govern the provision of supplementary benefit and the principles that should govern the provision of the contributory benefits. It was never part of the notion of contributory benefits that they should be means tested.
In opening my right hon. Friend suggested that there would be something wrong if someone retired from his employment at the age of 61 or so and drew, for example, £30 from an occupational pension scheme and £30 unemployment money. That was not the intention of Beveridge. There is nothing wrong with a contributory benefit and a person receiving under it an income that is of high and generous proportions, especially because unemployment benefit is an extremely temporary benefit. My right hon. Friend invoked that point on his side of the argument, but I think that it belongs properly to ours.
A person who receives £30-worth of unemployment benefit will get a fair part of the benefit, and would still register as unemployed so as to draw supplementary benefits if this clause were not passed. Not for 12 months but for six months, because the earnings-related part of it is restricted to six months. He will get the rest for only 12 months. It is temporary because the whole purpose is to ensure that he is seen through until such time as he is able to pick up a job. There is no reason to feel that it is in conflict with the proper operation of the

scheme if in that temporary period he has a fairly generous income.
We should be trying to stop those who are abusing the system without clobbering those who are making legitimate use of it. It happens to be the case that most of those affected by Clause 4 are those who almost by definition, because they are entitled to an occupational pension, have been in regular employment. They probably have not drawn unemployment pay at all, or at any rate not very much, in the course of their earlier working life. They then come to the one time when they are likely to get something back for the considerable contribution—an earnings-related contribution—that people now make week by week.
The case that I know best is that of Post Office workers. There are many Post Office workers who do not want to retire at 60. In the past they did not have to retire at that age. They feel that they want to register for a job. They feel that they have to get a job because they cannot live without the extra income. If they have to wait a few months or weeks while obtaining a job, they should be entitled to the benefits that the system was designed to provide.
I agree with those who have said that the key to the correction of abuse is proper enforcement of the availability-for-work rule. If anyone voluntarily retires from a job when he could have stayed on, and even if he draws an occupational pension, I imagine that he will be caught by the six weeks' rule. Having voluntarily made himself unemployed, he would not be entitled to unemployment benefit for six weeks.
I should have had a great deal of sympathy with the Government if they had opened up the question of whether six weeks is the right period for the rule. If a person has made himself unemployed, should he be entitled to unemployment benefit after six weeks? Some people would say that if he has made himself unemployed, he should never be entitled to unemployment benefit.
Between the two points of view I think that there is a compromise. I do not know how much money it would produce if we were to make the period three months instead of six weeks, but it would produce something and would be a principle that we might be able


to support. However, enforcing the availability-for-work rule more rigorously in other respects would, I suggest, because it would apply for all ages and not only for people over the age of 60, produce a great deal more than £14 million.
I realise the danger of going along that path. We do not want a person who has lost his job—for example, a skilled craftsman—to be told that he must take the first job that is available irrespective of what it is. That was never the intention of the national insurance scheme. The intention is to see such a person through until he gets the sort of job to which he has been accustomed.
None the less, I agree with those who have said that some review of present practice is overdue. Both as regards the six-week rule and the nature of the employment that the person is entitled to wait for, we have probably gone too far to the other extreme.
The Government should also look carefully, as I think they have indicated they will, at the taxation of short-term benefits, the taxation of unemployment pay for people other than those affected by the clause. Surely that taxation would not be worth the candle. There is hardly anyone on unemployment pay who is above the tax threshold. If people have occupational pensions and are drawing unemployment pay, a large number of them are likely to be above the threshold. If there were a way of distinguishing between the two, we should probably get back the salaries of the civil servants and an awful lot more by the collection of the tax that would be involved.

Mr. Orme: If we employ my hon. Friend's argument about the taxation of short-term benefits, does he realise that the taxation will fall on the children, the unemployment benefit that is received by large families falling into that category? In fact, he would be bringing in that category while excluding those with quite substantial occupational pensions.

Mr. Cunningham: Yes, but there is no reason for a married man with four children paying less tax if he has a bit of occupational pension and a hit of unemployment pay than if he has income of the normal sort. This is an anomaly that is created whenever a certain form

of income is taken and regarded as income for tax purposes.
I am the first to agree that the idea of the Inland Revenue communicating code numbers to all the unemployment officers throughout the country, which is what would be involved, is enough to make the mind boggle. The losses in civil servants' time and the money involved would be considerable. However, that needs to be considered. I say that because the other week the Treasury, or my right hon. Friend's Department—I am not quite sure which—estimated the loss to the Revenue that would be involved in taxing unemployment nay. I think that the loss was estimated to be in the region of £150 million.

Mr. Patrick Jenkin: The figure given to me was £300 million.

Mr. Cunningham: From memory I think that that figure related to sickness benefit as well. For the moment I am talking only of unemployment pay. I think that the figure was approximately £150 million. If that is true, for 1 per cent. of that take we could buy a lot of civil servants, even at civil servants' salaries. One would think that it would pay for itself. However, I find the estimate of £150 million to be highly dubious. I cannot see how the normal recipient of unemployment benefit would have enough tax to pay if his receipts were taxable to produce a gain of that order.

Mr. Patrick Jenkin: That is because our tax system is cumulative. If we spread personal allowances over the whole year, the income has to go in and it is taxed.

Mr. Cunningham: That amounts to saying that one would not have the rebate that operates at the moment. Even so, I find it a surprising figure. That only goes to show that it needs to be looked into very carefully and that the Government should come back and give sufficient of the facts for us to make up our own minds. They should not say that they have decided to do it or not to do it. It should not be done unless there is a clear case for saying that the return is at least 30 times the extra cost of administration. Otherwise, it is not worth doing.
I should like to draw attention to three anomalies which would arise if we


were to allow the Government to have their way on Clause 4. First, as has been said, those who save their money instead of putting it in to an occupational pension scheme would not be affected. Indeed, anyone who, instead of having what would normally be called an occupational scheme, has what I call a private pension scheme—a deferred annuity qualifying for tax relief under the provisions of the Finance Act 1956—would not be caught.
If a small company that does not have an occupational pension scheme pays its employees extra money so that they can buy a private pension scheme qualifying for tax relief under the 1956 Act, those people will be able to take the pension deriving from that scheme—a pension or a lump sum; it has to be a pension under the Inland Revenue provisions—and will not be caught. They can get receipts from such a scheme and unemployment pay with no offset whatsoever.
If I were the Chairman of the Post Office and the Government were to have their way, I should say to the unions "We shall terminate the pension scheme but pay extra in salaries so that employees can take out a 1956-type scheme and they will then escape this provision". That may be unlikely to happen, but with smaller businesses it certainly could and in some instances it does happen. That is only one of the loopholes that would be found to escape this provision. The anomalies would be unbearable.
Secondly, if the abatement of unemployment benefit resulting from an occupational pension scheme were £5, it would be £5 irrespective of whether the unemployment benefit were £30 or £20. Therefore, at the end of the six months, when the recipient loses his earnings-related portion, he will go on having the same £5 knocked off even though his unemployment benefit has fallen considerably.
No one can be asked to believe that that is a fair arrangement. It is the same kind of daftness as exists in the earnings rule. If a £5 abatement takes place, it is £5 off a pension of £20 or £5 off a pension of £5. Therefore it is not viable. In the end the Government would see that it had more anomalies than the cost was worth and they would terminate it. However, it is easier never to start something than to get rid of it after it has begun.
Thirdly, there is the point made earlier that during the 60 to 65 years of age period what bothers many recipients of occupational pensions is that they will lost part of their State retirement pensions unless they keep up the contributions. If I remember aright from reading the debates on the 1971 Act, that point was made very strongly. I see nothing in these proposals for dealing with that point.

Mr. Orme: Nobody will be in jeopardy through getting his card stamped for the period between the ages of 60 and 65, or whatever it might be.

Mr. Cunningham: It is nice to know that that disadvantage will not exist, although I do not understand how it will not. However, I take my right hon. Friend's word for it.
Finally, those of us who oppose the clause, but do not oppose all cuts in public expenditure and believe that there is a need to be severely restrictive on public expenditure feel an obligation to suggest where the money might be found. I am totally opposed to the old-fashioned notion that if we cannot find this £14 million within the DHSS by this means, we must find it by some other cut within that Department. I thought that after the lunacies of 1966 we had got away from that departmental approach to public expenditure control.
The Cabinet ought to have on the table before it a list, long or short, spanning all the Departments and showing the weak brothers in public expenditure—the items which might or might not be cut. The Government ought to decide those cuts according to their own assessment of priorities, irrespective of whether they are bunched in a few Departments or spread equally over all Departments.
I sympathise with DHSS Ministers who are told by the Treasury that, if they lose this provision they will have to take £14 million off something else. I think that we can probably assure DHSS Ministers that when they lose this clause we shall be on their side in resisting any such cuts in other DHSS programmes. Just as we expect to be successful on Clause 4, we expect to be successful in supporting them in that way.
I suggest three possibilities for other savings. We now spend or do not collect


as revenue more than £1 billion a year in the form of tax relief on mortgages. I am not suggesting that we should interfere with that system as a general principle. But one-tenth of that—£100 million—is tax relief above the basic rate. It is an interesting fact that of that £1 billion no less than £350 million goes to people who get some part of their relief above the basic rate. Therefore, more than a third of that relief is going to people who by any standards are pretty well off. We shall have to stop it at some time, but we can do it only gradually. If we start next April, we shall not save much in the next fiscal year.

Mr. Eddie Loyden: It might be in the Budget.

Mr. Cunningham: I have not yet heard of it. It might come along after we defeat Clause 4.
I should guess that if we were to limit this relief to the basic rate from next April, the saving next year would be about £5 million to £8 million. Just as £14 million is not to be sniffed at, nor is £5 million to £8 million.
We could save about £15 million if we were to reduce the value of home loss payments. This is not compensation for a person losing the home that he owns, but for a tenant who has to move as a result of rehabilitation work going on. It is astonishing to me that people who move from rat-infested tenancies to modern tenancies are at the same time given on average £400 to £500. Indeed many of my constituents find it astonishing, too. As it is the law of the land they want it because the next door neighbour has got it. They find it amazing that, having plagued the lives out of counsellors and Members of Parliament for years to get them from an old to a new place, they are offered not only home loss payments but the costs of moving to their new homes.

Mr. Rooker: I think that my hon. Friend is distorting the case on home loss payments. He represents a London constituency, but I represent a Birmingham constituency and I can tell him that my constituents and others in Birmingham have never had an average of £400 or £500 as home loss payment.
The rule regarding home loss payment applies not just because a tenant says that he wants to move out of an old house into a new one. We are talking here about slum clearance and rat-infested homes. People cannot be expected to keep the carpets, curtains and all the rest in a good state when the landlord himself does nothing and ultimately the local authority has to take over because the properties are not maintained.
It is not right to suggest that people should be deprived of a minuscule home loss payment on transferring into a decent home. The matter is by no means as straightforward as my hon. Friend seems to imply.

Mr. Cunningham: I am the first to accept that there is another approach to the question and that, while I represent an inner London constituency, my hon. Friend represents a constituency where the situation is not as I have described it. But I know that in inner London such expenditure represents a fairly large amount. Moreover, there is a minimum. There is no question of people getting £30. There is a minimum of £150. However, I feel that I should get off the subject of home loss payments now.

Mr. Leslie Spriggs: Before my hon. Friend continues—

Mr. Speaker: Order. I ask the hon. Member for St. Helens (Mr. Spriggs) to bear in mind that his hon. Friend has been speaking for 25 minutes. The debate is running very slowly, and it is already clear that some hon. Members who wish to take part will not have an opportunity.

Mr. Spriggs: I hope that you will not mind my intervening, Mr. Speaker, and I shall not lengthen the debate if I can help it. My hon. Friend has just mentioned tax relief on mortgage interest. Does he propose that a Labour Chancellor should take away the tax allowance on mortgage interest? If he does, I assure him that I shall oppose it.

Mr. Cunningham: I am happy to tell my hon. Friend that I did not quite say that. However, I think that I should leave that to another occasion, having expressed a view.
We shall have our battle on Clause 4 this time and that will be the third time


that the proposal has come up and the third time, I am sure, that it will have been defeated. I commend to both sides of the House that they follow the rule enunciated by James Thurber—" If first you do not succeed, try, try and try again —and then give up; it is not worth it."

7.3 p.m.

Mrs. Margaret Bain: I acknowledge your appeal for brevity, Mr. Speaker, and, as usual, i shall make a short, sharp contribution from the SNP Bench.
The longer the debate progresses, the more it becomes clear that the minds of right hon. and hon. Members are wonderfully concentrated on specific aspects of the Bill. I am sure that the Government Front Bench must by now have realised that the message of the House is that there would be general support for the Bill were it not for the inclusion of certain clauses which are causing great concern throughout the country. For example, no Member of Parliament would vote against the mobility allowance as provided in the Bill. I suspect that the Government are relying on that to ensure that the Bill goes through. In some ways, this is an immoral attitude, inasmuch as one or two unpopular measures might slip through because no one would wish to be seen voting against good measures.
The argument behind Clauses 4 and 13, which have caused so much concern, is that there will be a saving of £35 million in public expenditure. My party has always made plain that it is opposed to cuts in public expenditure. We are already seeing the effects of public expenditure cuts in the services given by our local authorities in basic services, such as home helps, meals for school children and so on. We do not wish to see any further cuts. We feel that the argument based on the £35 million represents an attempt to save a small sum of money at the expense of the elderly and students.
I am concerned, like other hon. Members, about Clause 4. The SNP does not oppose the basic principle of early retirement, but people of retirement age often want to work. The hon. Member for Islington, South and Finsbury (Mr. Cunningham) will recall that during the debate earlier this year on the earnings rule Member after Member pointed out

that many people of retirement age want to work because they do not wish to be regarded as being on the scrap heap. It is not acceptable to say that many people over 60 are signing on for unemployment benefit with no intention of taking up employment if it is made available. I assure the Government Front Bench that this is not the case in my constituency, where men over 60 come to my surgery to ask whether I have heard of any work they can take up, because they are keen to work. People are concerned not only about availability for work but about availability of work, and men are entitled to unemployment benefit in that situation.
The occupational pension is in many ways a deferred payment. People have opted out of a short-term benefit during their working life in order to have a more secure future in retirement.
The Minister said that the cut-off point of £25 appeared to be generous. I wonder how many hon. Members would like to live on £25 a week. Organisations outside which analyse the whole question of poverty do not agree with the Government about the figure of £25. I refer, as the hon. Member for Rochdale (Mr. Smith) did, to the Child Poverty Action Group, which has done much in the past to expose areas of concern for all of us.
In the present unemployment situation there is not much likelihood that people will be able to manage to find a job although they are sincerely looking for one.
I agree that it is necessary to enforce the availability for work rule in the context of unemployment benefit. The difficulty here is that, apart from the lack of jobs, with the cut-backs in the Civil Service there is at present increasing pressure on staffs in Government Departments and they are finding it extremely difficult to cope with all the various requests which come in, including making sure that people know of jobs available. This is what my local unions tell me, and I have no reason to believe that conditions are different anywhere else.
I turn now to Clause 13 and students. To take away the right of students to sign on for unemployment benefit during two of the short vacations goes against the basic concept towards which I


thought we were working, that is, universal opportunity in education and particularly in post-school education. Many students already find it extremely difficult to cope on their grants, and there is not a great deal of employment available anyway.
It is not as though they can just go out during the vacation and find a job readily, as most of us did when we were students. The market is not there at present.
Many married students in my constituency tell me that, as a result of Government cut-backs, they have lost rent and rate rebates, and now, if they are not allowed to sign on for unemployment benefit during the Christmas and Easter vacations, it will be more difficult for them to cope with the situation. The National Union of Students recently pointed out that 73 per cent. of parents cannot now afford to pay their means-tested contributions towards student grants.
I, too, am worried about handicapped students who need extra help with dietary and heating needs. What will the hardship scheme do for them? I am looking forward to hearing details of the scheme because at present I feel that it is not the answer.
We should examine how we finance post-school students in this country. We need to look at the purchasing power of grants and the overall structure, how money is given out, and whether there should be means tests for parents. To bring in a short-term measure like this and call it a hardship scheme is not to look at the reality of the situation.
Unlike some other hon. Members, we have no fear of going into the Lobby tonight with the Liberal Party. We feel that a warning shot must be fired across the Government's bows. Like the hon. Member for Rochdale and his party, I deprecate the absence of the official Opposition and their failure to keep their Members here to show their displeasure at this piece of legislation as it goes through. But, of course, the SNP and the other minority parties are becoming recognised as the official Opposition in the He use of Commons.

7.9 p.m.

Mr. J. W. Rooker: I agree with the hon. Member for Dunbartonshire, East (Mrs. Bain) in her comments about the Conservative Opposition, although I do not accept her closing remark. In addition, as I said earlier, I think it is a thundering disgrace that there is not a Minister from the Department of Education and Science here today. That the Whip on duty when the complaint was first raised did not do anything about it is a further disgrace. The Ministers from the DHSS do not have the answers to the points which hon. Members on both sides are making regarding students. It is bad that the Government have not taken heed of what was said earlier.

The Under-Secretary of State for Social Services (Mr. Eric Deakins): I can assure my hon. Friend that questions about students will be answered on behalf of the Government as a whole and not merely on behalf of a Department.

Mr. Rooker: That is not good enough. It is no good questioners being fobbed off by Ministers who have only half an hour to reply to a debate. It is no good their dealing with the matter with the help of a few shorthand notes knocked together by their advisers in the box. The Chief Secretary set a good example, but for the wrong reasons. The case for the Bill has not been made out.
The case against Clause 4 was made by the present Secretary of State for Education in a Committee meeting in 1971. She said that the Conservative Government
are setting a trend, with the changes they are making in the Bill, towards a direct breach of the National Insurance system and the fact that benefits are paid, not as an act of charity or a donation, but as a matter of entitlement "— [Offirial Report, Standing Committee G; 25th May 1971, c. 165.]
Not one word has been said so far by Ministers to change what my right hon. Friend said five years ago.
There is much confusion over the financial benefits of the Bill. The Memorandum says that the Bill will save £75 million of public expenditure. It is admitted that the National Insurance Fund will save £60 million on the earnings rule, and it is argued that the net


saving will be only £45 million. I calculate that the savings will amount to £60 million less the £3 million to be paid out in mobility allowances, which makes a net saving through the Bill of £57 million. That includes £14 million from the operation of Clause 14 and £1 million to be screwed out of the students. That is not the same as the estimate that my right hon. Friend made today.
According to the Official Report it is clear from answers given to my hon. Friend the Member for Coventry, South-West (Mrs. Wise) that the Government do not know how many people are involved in the cut-back of occupational pensions, they do not know who are involved and they cannot give the proper figures relating to the financial savings involved. How do they know that they will save £14 million from screwing down occupational pensioners? The best that they can come forward with is a half-baked idea that certainly looks as if it came from the box which I mentioned earlier. The information that we have had from the Government so far does not appear to have been a planned part of the speech of my right hon. Friend's speech, who said that another means-tested benefit would be applied. There was no mention of who has been consulted, or of the level at which the provision would bite.
We have not heard which students will be involved, which courses they will be taking, or anything else. Apparently, Ministers will decide that themselves. Some students will not be regarded as students for the purposes of the Bill. Clause 13 is far too wide. I cannot understand why the hardship scheme has not been more carefully considered. Not enough thought has been given to it. I think that it was concocted only after Monday night, when Ministers had a heavy time of it at a meeting in Committee Room 10.
The Bill discriminates against men in favour of women or pension entitlements. Clause 13 refers to the age of 60—the age at which women retire. Men have to work until they are 65. At Lucas, a large firm in my constituency, women have to retire at 57½ years of age. That is compulsory, and it is expected that they sign on for the dole for 12 months.

They collect unemployment benefit—and they will still be able to do that after the Bill is enacted. If they can do that why should not men be able to draw unemployment benefit when they are 62? That is unequal treatment between men and women. Have the Government taken into account the fact that women in private companies are sometimes forced to retire early? Drawing unemployment benefit is part and parcel of their survival until they are 60. Women expect and will be able to collect at least one year's unemployment benefit.
We have heard cock-and-bull stories about the 20,000 occupational pensioners. Earlier I intervened from a sedentary position to suggest that hospital porters are affected. My right hon. Friend said that that was not so, but I am prepared to take the word of the General Secretary of the Confederation of Health Service Employees rather than that of my right hon. Friend. I do not think that my right hon. Friend has been correctly briefed on this matter, which has been festering in the pigeon-holes of Whitehall for many years.
On Monday I was given an example of a hospital porter who is a widower retiring at 62 after 40 years' superannuable service and living in London. During his last year of service he could easily have earned £2,928—including shift pay of about £4 a week, bonus at 25 per cent. and an element of enhancement for weekend work on top of a basic rate of £37·08 a week. His pension would be £28·16 per week, and he would therefore lose £3·15 from his unemployment benefit of £12·90 at any time when unemployed. I admit that that man will not lose all his unemployment benefit, but if he loses one penny he is affected by the Bill. That is why the figure of 20,000 is a misnomer. The figure is based on such a man losing all his unemployment benefit. But many thousands will lose a proportion of benefit, and that is not taken into account. Ministers are not coming clean about the true effects of the Bill.
I have also been told that female workers in a factory assembling telephones in Wales will be affected by the Bill because of earnings and pensions rates. Three general secretaries of three trade unions informed me of the situation on Monday evening.
The Bill is part of the 22nd July measures. It is not part of the commitments in the party manifesto. When we all voted on 22nd August we did not vote to accept the 22nd July measures in their entirety, but we voted against the hypocritical stance of the Opposition in their amendment.

Mrs. Wise: Does my hon. Friend accept that we voted against the Opposition, but we did not vote, nor did we imply that we voted, in support of the July package?

Mr. Rooker: I accept that. I put the matter in too simple a fashion. We did not accept the 22nd July measures, but we always knew that those measures required at least four Bills and at least another six Statutory Instruments. We knew that there would be an opportunity later this Session to pick and choose the issues that we would support or otherwise. This is certainly one of the measures that many of us do not intend to support. I shall not go over the others.
We need a commitment from the Minister tonight. It is all very well for the Opposition to say that they will not vote against the Bill tonight but will oppose Clause 4 in Committee. The reason for that is connected with Clause 13. However, the Conservative Opposition can do that successfully only if all the Opposition parties vote to take out Clause 4 and at least one Labour Member also votes to take out that clause. It needs only one Labour Member, because of the balance in Committees. All that it needs is at least one Labour Back Bencher who has spoken in this debate to be a member of the Committee. So far, all have been opposed. All that we ask is that on the Committee there should be one Labour Back Bencher who has spoken in this debate—or more than one. We are all volunteers and full-time Members, not being barristers with briefs to read, and so on. We would settle for just one such member being put on the Committee.
That is the only way that Clause 4 will be taken out in Committee. I suspect that it will not happen. There is only one way to make sure that we overcome that problem, and that is for all Conservative Members who have gone

running off to try to save the Cambridge seat to return tonight and vote against the Second Reading.
I conclude by repeating that the Bill is a disgrace to the Labour Party. It is certainly a disgrace to the present Government. It is hypocritical of the Government to put into the Bill one or two little parts and to say "These are the good parts. You would not vote against those, would you?" They are measures which clearly could be tacked on to a Finance Bill or any other ragbag of a Bill during the remainder of this Session.
The Bill does not deserve the support of any hon. Members even of those who claim the patronage of the payroll vote. Some Labour Members are under a three-line Whip today but have been paired. They are not in the embarrassing position of having to vote for this tardy little measure. We would not want to embarrass some of them by putting down Questions asking about their official engagements today and when they were fixed, because they were clearly fixed after the Business Statement last Thursday, when it became known that the Bill was to have a Second Reading today. That is even more of a disgrace.
No Labour Member—or Conservative Member for that matter—who represents people in a parliamentary consultancy fashion, such as civil servants and others who will be affected by the Bill, has supported this measure. They are conspicuous by their absence today. They will probably be conspicuous by their absence in the Lobbies tonight.
I notice that my hon. Friend the Under-Secretary is making notes for the winding-up speech of my right hon. Friend. He ought to say to my right hon. Friend "It is not worth the trouble. It will waste time in Committee. It will waste the time of Ministers and of Back Benchers, the time of the House and of the Clerks. Withdraw the Bill. Take it away."
Clearly, whatever happens tonight, Clause 4 will not be in the Bill when it receives the Royal Assent. That clause is one of the major planks of the Bill. That is the one that will cause all the trouble and take up all the time of the Committee. It is not worth pursuing. We want a cast-iron commitment tonight that it will be withdrawn. That would save a lot of trouble.

7.24 p.m.

Mr. Michael Shersby: This gloomy debate on a gloomy Bill has been enlivened by an entertaining speech from the hon. Member for Birmingham, Perry Barr (Mr. Rooker), which I much enjoyed. It has also been enlivened by the remarks of the hon. Member for Coventry, South-West (Mrs. Wise), who told us why it was that she voted not against the July measures but against the Opposition.

Mrs. Wise: The July measures have not been put before the House. The occasion concerned was an Opposition Supply Day. The Government had put nothing before the House.

Mr. Shersby: I am grateful for the hon. Lady's explanation. It makes us much clearer than we were a few moments ago.
Those of us who have been listening to the debate know that the Bill is a gloomy Bill because it withdraws from citizens either rights which they are now enjoying or rights which, as a result of decisions of Parliament, they had every reason to think that they would be enjoying before many more months had passed.
I want first to comment on the proposal to reduce the unemployment benefit for occupational pensioners over the age of 60. As we know, this is a proposal which has a very curious history, indeed, and which, as the Secretary of State has said, has been under debate for many years. I think I am right in saying that it has been under debate for about 10 years as of tonight.
We have heard a great deal about the remarks of the right hon. Member for Hertford and Stevenage (Mrs. Williams) in Standing Committee in 1971. I have read those remarks. It seems that the substance of what the right hon. Lady was saying was that benefits are paid not as an act of charity or donation but as a matter of entitlement. I agree with that.
I believe that there is the crux of the argument tonight. Are occupational pensioners entitled as of right to unemployment benefit without these new restrictions, or are they not? That is the question which must eventually be decided by the House when it is considering the Bill, either in Committee or on Report. I am sure, from what I have heard in the

House tonight that both of those stages will be lively.
It is very appropriate that my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) has rightly criticised the Government's proposal to single out the occupational pensioner for a blanket disentitlement to unemployment benefit. Not only does this breach the principle that unemployment benefit and national insurance benefits exist as of right. It pinpoints the fact that the Government are picking upon the man with an occupational pension. Surely the way to deal with abuse of this system, where it exists, is to tighten up the rules governing availability for work, not to introduce a new means test, which is what the Bill intends to do.
There are a number of substantial objections to the proposals to reduce unemployment benefit for occupuational pensioners. First, people who have saved money via occupational pension schemes will be treated worse than those who have not saved. This means that there will be a further disincentive to save, which I am sure all of us must bitterly regret.
However, the major objection to this proposal is that it breaches the national insurance principle whereby benefits are paid in full in return for contributions made. Except in the case of the earnings rule, no other national insurance benefit is affected by other income. Therefore, if these proposals are carried into law, there will be a serious danger of the principle being extended to other forms of national insurance benefit, including the retirement pension.
One cannot help wondering how many more months or years will pass before the Secretary of State rises at the Dispatch Box to tell us that the economic situation is such that he is forced to bring before the House further measures to extend the principle that is enshrined in this Bill. I warn the House of that danger tonight in considering these proposals.
While there is a case for withdrawing benefit, on the ground of abuse, from occupational pensioners who do not really want obtain to work, that argument does not apply to those who are unemployed but who are genuinely looking for work. The Government's proposals make no distinction between the two. The


genuinely unemployed will have to suffer with those who are simply "bomping on" for benefit without any intention of working.
Every hon. Member knows the bitter resentment that that type of abuse causes. Every hon. Member knows that it is a very difficult and sensitive subject to debate. Therefore, it is only right and proper that the Government should give very careful attention to this type of abuse and should bring before the House without delay proposals for dealing with it.
My right hon. Friend the Member for Wanstead and Woodford has referred to experiments that are being conducted in Australia. He also made the point that perhaps what is being done in Australia is not suitable for the United Kingdom. Certain elements in the Australian scheme are worth looking at, particularly those dealing with a man who moves to an area where there is no prospect of his getting another Job that is similar to the one he had before.
For example, there are people who move to the seaside, or to some remote area of the country, where there is no opportunity for them to practise their trade or profession. The distance from a job is another important element of the Australian proposals.
I agree with my right hon. Friend the Member for Wanstead and Woodford that it is important to get the right balance to ensure that there is fair treatment for everyone concerned. If we could get rid of the abuse that has existed in the past few years, we should get rid of a major area of controversy that surrounds the whole question of unemployment benefit.
From what other hon. Members have said, we know that there is substantial public opposition to the proposals in the Bill. Opposition has especially come from those who have to retire at 60, without the option to continue employment, ano who need to continue working in order to maintain their standard of living in the face of continuing inflation.
When I raised this point earlier, the Secretary of State said that it was the kind of comment which might come from me. I assure the Secretary of State that there are many retired occupational

pensioners in my constituency who genuinely need to go out to work in order to sustain their standard of living. They are not living on high incomes. It is only fair and reasonable that those people should be entitled to seek employment and to give the country the benefit of their skills in order to make their contribution to the economic recovery. I hope that we shall not hear any more remarks of the kind made by the Secretary of State.
There is also important opposition from the trade unions. In my own constituency the Post Office Engineering Union in particular has been in touch with me. It, at least, has a copy of the Bill and together we have studied its provisions. Most of its members have to retire at 60. They particularly will find the proposals difficult to live with.
The Post Office Council summed it up especially well when in its letter to all MPs it pointed out that the Government proposals were an attack on the fundamental principle of post-war reconstruction of the social security system. I would ask the Government to think again.
It is not often that we get a debate, even one like this which is rather sparsely attended, when there is almost unanimity. I understand that the Government want to save £70 million and I support their intention of doing so. But they should reconsider the method. Let them take up the suggestion made earlier and consider taxing short-term benefits such as unemployment and sickness benefits.
It has been said that this would bring in between £150 million and £300 million a year. There is no reason why a man should be less taxed because he has unemployment benefit or because he has an occupational pension. I do not underestimate the difficulties of introducing such a tax, but I hope that the Minister will say a word about this later.

Mr. Spriggs: I did not catch what the hon. Gentleman said. Did he propose that the Government should tax sickness benefit?

Mr. Shersby: I think that short-term benefits should be looked at. After all, all benefits are income. It is only right that this should be looked at. When asked about this a few weeks ago the


Prime Minister pointed out that there would be great difficulties. No one underestimates the difficulty, but some people who are in receipt of sickness benefit are in receipt of a salary at the same time. It is only fair and reasonable that no one in receipt of a short-term sickness benefit should be at an advantage as a result.

Mrs. Wise: The hon. Gentleman has displayed a lack of knowledge, which does not actually surprise us. The vast majority of people who get sickness benefit have a corresponding deduction made to their salaries. The hon. Gentleman claimed that there was unanimity on this matter. There is no unanimity with regard to the general purpose or, indeed, on the detail. His right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) specifically said that the Conservatives agreed with the provisions relating to students. That is certainly not the case on this side of the House. Please do not bring us on to your side, because we are not willing to be dragged there.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. I am on no side.

Mr. Shersby: The hon. Lady has not been listening because I have not made any claim that there was unanimity on this subject. I pointed out that it was a matter which had been raised and which should be investigated. That is fair and reasonable.
I briefly turn to the earnings rule, which has caused a lot of people to lose hope and to become totally disillusioned with the operation of Parliament. Last year Parliament decided to raise the earnings rule limit to £50. Like many other hon. Members, I have been tackled by my constituents about what will happen. I told them "In January last year the House of Commons took a decision which involved the Government being defeated. As a result of that decision the limit will rise to £50."
Everyone has gone away in the belief that Parliament has made its decision and that is what they will have to cope with. Now, only 18 months later, they find that the Government are seeking to reverse that decision. This will be demoralising for many people and will discourage many of them from working. It

means that a pensioner earning more than £35 a week will be paying two forms of taxation. Those people will have their pensions reduced and they will be paying income tax on their earnings.
The proposal that the £35 limit will be reviewed annually and will be increased in line with earnings, is not satisfactory. The hon. Member for Islington, South and Finsbury (Mr. Cunningham) made the point earlier that this would be a sort of indexed review related to the rise in earnings. But one has to remember that increases in earnings may be, and in all probability will be, much less than the rise in prices over the same period. One wonders how effective such a review will be and whether we are not being fobbed off with a poor substitute for an increase in the limit.
I am not one of those hon. Members who criticise students. Most of the students with whom I have come into contact are hard working and diligent. Many of them have hardship either because of family circumstances or because they are married. I share the concern of the hon. Member for Perry Barr about the proposed arrangements for reviewing hardship which I cannot see anywhere in the Bill. It will be important to scrutinise those arrangements in Committee.
Let us hear no criticism of students. All of us when we are old and perhaps not able to draw unemployment benefit will depend upon these young men and women for the success of our country. I am sure that many of them will have to bear hardship, but I am sure that they will do so with fortitude.
This is a gloomy and bad Bill. None of us welcomes it. I am sure that the Committee will do a great job in tidying it up. I am sure that when is comes back to the House it will be very much shorter and that we shall be able to pass just those elements which nearly everyone agrees to be desirable.

7.40 p.m.

Mr. John Ovenden: It has been pointed out that what we are talking about is a method of saving money. It is often put to us that because this was part of the July package we must accept it without question.
I want to echo what some of my hon. Friends have said already. Many Government supporters do not accept the


economic strategy behind the July package and do not feel themselves bound to support a measure just because it was in that package.
We have heard a number of suggestions from Opposition Members, from which I dissociated myself completely, of ways in which the Government could save this sum. For example, we have had the appalling suggestion from the hon. Member for Liverpool, Wavertree (Mr. Steen) that we should deny any benefit to unemployed school leavers. We have had the equally appalling suggestion from the hon. Member for Uxbridge (Mr. Shersby) that we should make up this money by taxing the sick. My hon. Friends and I do not go along with those ideas even though we oppose some of these provisions as bitterly as do those two hon. Members.

Mr. Steen: The hon. Gentleman is twisting what I said. I said that there were 250,000 young school leavers without work and that the Government were doing nothing about them. I suggested that they should be given the opportunity to do something of benefit to the community in return for a wage equivalent to the unemployment benefit so that we did not increase the rate of inflation. The hon. Gentleman must not misinterpret what I say.

Mr. Ovenden: If I have misinterpreted the hon. Gentleman's views, I apologise. However, he is one of the easiest Members of this House to misinterpret, because he is one of the most difficult to understand. I realise now that what he is advocating is a system of enforced cheap labour for the young. That is just about as commendable as the scheme proposed by the hon. Member for Cornwall, North (Mr. Pardoe) to turn our unemployed into navvies by abolishing the machinery at present used for road building.
As I was saying, the hon. Member for Uxbridge wanted to make up the money by taxing the sick. We dissociate ourselves entirely from that.

Mr. Shersby: The hon. Gentleman is also twisting what I said. I pointed out that quite a lot of people—not those to whom the hon. Member for Coventry, South-West (Mrs. Wise) referred—enjoy both sickness benefit and their normal incomes when they are sick. They may

not form a majority, but there is no doubt that there are a substantial number of people in that position. All that I say is that the Secretary of State should look at this matter. I cannot see anything wrong in that. The right hon. Gentleman should ensure that everyone was treated on a fair and reasonable basis.

Mr. Ovenden: The hon. Member for Uxbridge does not wish to commit himself too far. There is no doubt that he is talking about a form of taxation of the sick. But I shall not go into that any further, because I wish to return to the July measures—

Mr. Leslie Spriggs: Will my hon. Friend give way?

Mr. Ovenden: I shall give way to my hon. Friend in a moment. I have given way twice already, and I have not really started yet.
I was talking about the July measures, and I had pointed out that it should not be thought that we accepted any measure just because it was in that package. There are ways that the Government could save money and reduce the public sector borrowing rate, if that is what they are intent on doing, far more effectively than the proposals in this Bill.
Some of my hon. Friends will recall that they accompanied me into the Division Lobby at the conclusion of one of our debates on the last Finance Bill to vote against a proposal of this Government costing more than £100 million to give additional income tax relief to people earning more than £6,000 a year. We could have saved that money—and that was £100 million, which is more than the total saving in this Bill. So I am not enamoured of the arguments put forward in favour of the Bill.
It was my intention to speak almost exclusively about Clause 4 and occupational pensioners, but, before I do that, I cannot avoid commenting on the appalling spectacle that we have seen today in relation to Clause 13. it is disgraceful that the Government should introduce a Bill of this kind, having talked about making provision for hardship among students, and be capable of saying how that scheme will work. They could have done justice to their claim if they had prepared the scheme fully. We have been told that my right hon. Friend


the Minister for Social Security will be dealing with this when he replies to the debate. However, I think that it is a pity that my right hon. Friend the Secretary of State did not deal with it when he opened the debate. I suspect that we shall have a very hasty scheme cobbled together in the five or six hours which elapse between the two speeches. If the scheme was ready, it could have been announced by my right hon. Friend the Secretary of State earlier.

Mr. Orme: I am sure that my hon. Friend does not want to distort the facts about this. Certainly I shall try to say more about it when I reply to the debate. However, we shall have a full Committee stage. The Bill will not be on the statute book before April. There will be ample time to discuss the proposals which I shall be putting forward on hardship, and my hon. Friend or anyone else will have an opportunity to amend them if he thinks fit.

Mr. Ovenden: I accept that assurance. However, I am worried that we are being asked to approve in principle a Bill which removes the entitlement to supplementary benefit and will have a drastic effect on the living standards of our students without any assurance that anything effective is being offered to help them. I am appalled that the Government are proposing a hardship scheme in place of the supplementary benefit scheme. I always believed that the supplementary benefit scheme was there to meet cases of hardship. I cannot understand why the Government should now be seeking to dispense with it and to replace it with another scheme to relieve hardship.
The reason that this has become so much of a problem over the past year or so has nothing to do with any change in the attitude of students. It has to do with the dramatic decline in the employment situation. Many students do not wish to spend time at Christmas and Easter on supplementary benefit. However, they no longer have the opportunity to do anything else. I hope that my right hon. Friends will look at this again.
I come now to Clause 4, and I wish to express my complete and total opposition to it and the way that it withdraws unemployment pay from certain occupational pensioners.
The proposal has a long and shabby history. It was introduced by the Opposition when they were in Government. We have seen today how the Opposition have changed their minds. I am aware that the right hon. Member for Wanstead and Woodford (Mr. Jenkin) was not in the Social Security Department at the time and that he can probably shield behind that fact. However, there is such a thing in Government as collective responsibility. Therefore, he bears the responsibility, with his colleagues, for the Bill which was introduced by the last Conservative Government.

Mr. Patrick Jenkin: I make no bones about it. I was a Minister at the Treasury at the time. But, having introduced the clause, it was defeated in Committee and we gracefully accepted the defeatand did not reintroduce it.

Mr. Ovenden: It was graceful of them to adopt that kind of approach. However, they introduced the scheme, and they appear now to have changed their minds. Many Government supporters welcome them to our cause, bearing in mind that nothing arouses more joy in Heaven than a sinner who repents.
This problem with occupational pensioners is based on popular mythology rather than on fact. Thousands of occupational pensioners are thought to be enjoying a high standard of living by using the dole to supplement their pensions. There have been unscrupulous attempts to arouse public support for action of the type now proposed, and it has been fuelled by irresponsible stories intended to present an entirely false picture of occupational pensioners.
Not all occupational pensioners are retired bank managers, telephone managers and senior civil servants. The majority of them are postmen, Post Office technicians, clerks and National Health Service employees who retire at 60 because they have no other choice. This proposal may have a great deal of popular support, perhaps from people who are not aware of the realities and who have been worried by the cheap sensationalism which has surrounded this issue. However, uninformed public support is not really a basis or justification for good legislation.
There is a great deal of misunderstanding on the Treasury Bench about the position of occupational pensioners who retire at 60. The reason why I regard this Bill as even more objectionable today than when it was first introduced by the Tories in 1971 is that the economic situation affecting occupational pensioners has changed. In 1971, people in the public service had the opportunity to stay on after the age of 60. Possibly they had to take lower-grade jobs, but they could continue in the public service. That option is no longer open to anyone in public service today. Retirement at 60 is not voluntary. It is now compulsory. It means that for almost all of them it is the sack at the age of 60.
It may be said that people took on jobs in the public service in the knowledge of this fact. But many of them joined the public service in a very different economic and employment situation. They believed that they would have the opportunity to stay in their jobs after they reached the age of 60 if their economic circumstances required them to do so.
That is no longer true. That is why this Bill is harsher upon public servants than was proposed by the Tories five years ago. The proposals will be bitterly and deeply resented throughout the public service, not just by people who have retired or by those who are about to retire—whether or not they intend to claim unemployment benefit—but by thousands of their colleagues who feel, quite rightly, that the Government are trying to take away a basic right that they previously enjoyed.
This proposal is an erosion of the national insurance principle. That was made clear by the Labour Party spokesman, the right hon. Member for Hertford and Stevenage (Mrs. Williams), who is now Secretary of State for Education, when she opposed the 1971 measure. The hon. Member for Birmingham, Perry Barr (Mr. Rooker) urged me to read her speech out fully so that it would be written into the record. He has already read out a chunk of her speech. We agreed that if he read a bit, and I read a bit, and we carried on like that, in the end we should get it all into the record.
One of the most significant things the right hon. Lady said was:
My first point is that considerable damage is being done to the insurance principle. All people concerned have paid over the years for unemployment benefit. They are then told that, because of a rather curious means-testing system, they cannot in certain circumstances draw the benefit for which they have paid because they are getting an occupational pension.
Also—and this is a crucial element—although contributions have been paid, and have had to be paid by law, the Government then regard the people concerned as having no entitlement."—[Official Report, Standing Committee G, 25th May 1971; c. 66-7.]
The right hon. Gentleman went on to criticise the Government and accuse them of playing ducks and drakes with the whole basis of the national insurance system. That is precisely what the Government are doing in this Bill. If the Government are determined to proceed with the proposal, they will bring upon themselves the hostility of millions of public service workers and will bring themselves into confrontation with unions, many of whom have given unswerving support to the Labour Government throughout the economic difficulties. This proposal is tantamount to the imposition of a means test on unemployment benefit, but it is a curious test which takes account of only one source of income. Occupational pensions are deferred wages, as many of my hon. Friends have made clear to the Government tonight and the Government have admitted that they accept this. Occupational pensions are not, as my right hon. Friend the Secretary of State implied, a form of compensation for loss of job. They comprise money which has been paid by and on behalf of the occupational pensioners concerned.

Mr. Ennals: In so far as occupational pensions are deferred pay, they are pay deferred to be paid during the period of retirement.

Mr. Ovenden: There is, in no sense, a compensation payment. Occupational pensions comprise employees' own money and contributions, and money which employees have had no choice about paying. In the public service one cannot choose whether or not one is in a super-annuation scheme. Those of us who have worked in nationalised industries


know that we have to accept that as a condition of employment. Those in noncontributory pension schemes also pay, in effect, because their salaries are set at levels which take account of that.

Mr. Ennals: This is an important part of the debate. From what my hon. Friend the Member for Gravesend (Mr. Ovenden) says, it appears that the occupational pension would be lost. What such a pensioner would lose, as a result of the Bill, would be his unemployment benefit. He is getting a pension because he is retired from work. It is deferred pay and it is pay deferred in order that he may be compensated during his period of retirement.

Mr. Ovenden: But such a pensioner has also paid contributions to the National Insurance Scheme and, provided he satisfies the criteria laid down for benefit he is entitled to benefit, and it should not be offset against his occupational pension. This restriction on unemployment benefit applies only to occupational pensioners. It does not affect those who have provided for retirement through private incomes, or who invested privately, or who live on savings. It does not prevent those who have won £250,000 on the football pools from drawing unemployment benefit. But it reduces the entitlement to benefit of a postman who has retired with a pension of £26 a week to which he has contributed. It takes away from him that which he has earned through his national insurance contributions.
The Secretary of State cannot—as the right hon. Lady the present Secretary of State for Education said in 1971—play ducks and drakes with the national insurance principle. I am not prepared to argue whether the level of cut-off should be £25, £35, £45, £55 or £75. I am not prepared to support the Government on this clause whatever figure they insert. We are not here to haggle about figures when the basic principle is involved. A man who has contributed to national insurance is entitled to benefit.
When the Tory Government brought out this shabby scheme for its regular airing, we opposed it. Those of us on the Government Benches who oppose the Bill want to make clear that we are consistent, even if events dictate to my right

hon. Friends on the Front Bench that they should not be consistent.
The Government would be well advised to announce that they are prepared to drop Clause 4 of this shabby Bill. The Government will not win. They will be defeated on Clause 4. The Bill could have been defeated tonight if the official Opposition had the courage of its convictions—but that is too much to expect.
The clause will certainly be defeated in Committee—if the Bill is referred to Committee—because if there is fair representation there will have to be Labour Members on that Committee who are hostile to the Bill. If the Tory Party sticks to its guns—although we cannot trust it not to do another turnabout—the clause will be defeated. What will the Government have achieved? They will have earned the hostility of the public service, of the unions and of workers. This Government will be remembered with hostility by public service workers as the one which tried to take away their basic national insurance rights. I urge the Government not to go down in history as the people who earned that reputation but, instead, to tell us tonight that Clause 4 will be taken out of the Bill.
It is significant that no hon. Member who has spoken from the Labour Benches has supported the Government on this question. If, as I hope, there is a vote at the end of the debate tonight, the only people in the Government Lobby will be the payroll vote. That will demonstrate to the public and to the trade union movement that the Parliamentary Labour Party cannot and will not support this shabby measure.

7.58 p.m.

Mr. Anthony Steen: I apologise to the House for my earlier absence. There were important elections in the 1922 Committee and I felt that I should be there. However, I washere to witness the smears and innuendoes of hon. Members on the Labour Benches. I want to make my point clear because I am sure that there has been a misunderstanding. If I take it slowly, hon. Members will understand my point and immediately seize upon its importance and value.
I suggested this afternoon that a young person's benefits were not sacrosanct.


When young people do jobs, they should be paid. But when they have never had jobs, when they are school leavers, direct from school, when they have never paid for any stamps or done any job of work, when there is no prospect of their getting work or getting on one of the Government job bonanzas, the question arises whether they should be able to claim benefit automatically.
The benefit is payable only if there is no work to be done. Hon. Members opposite must know of numerous instances of personal need in their constituencies which would be satisfied if young people were prepared to give time and effort—as most are—to help the elderly, the lonely and the handicapped.
If young people are out of work, while there is work to be done in the area, it is immoral to pay them benefits automatically. They should do the work which is there and get a wage at the present level of unemployment benefit. If the hassle between hon. Members opposite and myself is merely over the amount to be paid, let them say so. But if they are opposed to the principle, let them tell the House of any Socialist philosopher who says that people should get paid for not doing work when there is work to be done.

Mr. Skinner: I realise that the hon. Gentleman is trying to dig himself out of the hole he made for himself three or four hours ago. No doubt his words at that time are recorded in Hansard precisely as he said them.
The hon. Gentleman speaks about youngsters having to find work, but many of them try and fail. I am thinking of the 400 prospective young miners in North Derbyshire who went straight from school to the training centre at Grassmoor, only to be sent back by the NCB despite the fact that many miners wished to retire early. I admit that these youngsters were not looking for work to help the elderly, but they were ready to dig coal and help the elderly in that way. The State, through the NCB, refused to allow them to do the work.

Mr. Steen: There is no question of my digging myself out of a coal mine or a pit. I have made my case repeatedly and I cannot believe that the hon. Member

for Bolsover (Mr. Skinner) is not bright enough to understand what I am saying. The 400 young miners who were turned away from the training centre have nothing to do with what I was saying earlier. Is the hon. Member suggesting that they should sit on their backsides and receive benefits for doing nothing, or does he admit that there are things which they could do in his constituency? If there are, why does he not encourage them to do something?

Mr. Skinner: I have done so.

Mr. Steen: The Government are refusing to recognise that a lost generation of young people who have nothing to do is developing. They refuse to recognise that their own measures involving the expenditure of £400 million to create jobs for young people are still leaving many young people with nothing to do. The House should be aware of the figures: about 200,000 school leavers and 416,000 young people under the age of 25 have nothing to do.
I hope that before hon. Members opposite home in on me next time they will appreciate the gravity of the situation. It is not trivial; it must be taken seriously. I hope that the next time hon. Members opposite attack me they will suggest alternative proposals for helping the hundreds of thousands of young people who are doing nothing.
There is a further twist to this problem because local authority services will be declining rapidly and social service departments in our cities will be unable to sustain the present level of welfare and social work. As a result, there will be more need and more problems. That is why I am so vehemently opposed to Clause 4. The clause says that people are old at 60 and that if they register for benefit they should be deprived of it on the basis that there is no work for them to do.
Is it the Minister's wish to save money which compels him to pursue Clause 4? If so, he could save £90 million a year by scrapping the Job Creation Programme which employs only 25,000 young people. Alternatively, is the Minister concerned about the dignity of old people doing something with their time? The over60s could be doing something for the benefit of the community. The limited


definition of the word "work" prevents old people from doing something for the benefit of the community in return for benefits. If we do not redefine the word, the elderly will be punished for registering for work. "Work" must include the relief of social distress and contributions to community betterment.
We could then see both young and old unemployed people doing something for the benefit of others. In return, they would get a wage equivalent to the prevailing level of unemployment benefit. Let hon. Members opposite make no mistake. This suggestion cannot lightly be pushed aside. We could mobilise young and old for the benefit of others.
If hon. Members opposite reject that proposal, they are saying that they do not want young people or the elderly to do anything. I challenge them to say what they feel should be done. So far they have not come up with any answers.

8.7 p.m.

Miss Jo Richardson: I apologise to my right hon. Friend the Secretary of State for not being here for his speech, but I was returning from a visit to Scotland with a Select Committee. Some of my hon. Friends have been trying to describe to me what my right hon. Friend said and I am now more confused than ever about what is in the Bill.
I am particularly interested in Clause 13 and I had hoped to hear a good description of it from my right hon. Friend together with a list of the sort of people to be excluded. I am told that there is to be a hardship committee. I shall be interested to know how the committee will operate and who will serve on it.

Mr. Skinner: They could put the over-60s on it.

Miss Richardson: I shall refer to the speech of the hon. Member for Liverpool, Wavertree (Mr. Steen) only because he referred again to this fantastic scheme which he has already proposed on several occasions in the House. I should like to know from him at some stage—please not now—what the scheme entails. I have visions of young people in an area being rounded up by someone who will presumably have toured the area to see what odd jobs need doing, which old people's hedges need cutting and which of their houses need painting.
Will these young people be employed by the DHSS? It is from that Department that they will get benefit. Or will they be employed by the local authority? Under the present pressure of financial stringency, I hardly think that they would welcome having to set up yet another Department in order to employ these hundreds of youngsters in an entirely new scheme. The whole principle of the hon. Gentleman's suggestion is wrong, and if it were not it would be unworkable.

Mr. Steen: The first point which I must make plain is that it would not be compulsory. Second, if a young person chooses to do no work when there is work to be done, the Government can choose not to pay him. I am saying no more than that. The second point is that the jobs will be created.
I know that the hon. Lady may be able think only in terms of bureaucracies, but I am suggesting that the young have enough initiative to create their own work. They have only to look around the community to see what needs doing. Alternatively, they can go to a job shop to find a list of voluntary organisations which need help. There is nothing impractical about that. It is being done already through the Job Creation Programme.

Miss Richardson: The scheme gets more fantastic the more one hears about it.

Mr. Steen: It is too advanced for the hon. Lady.

Miss Richardson: Perhaps we can take it up on another occasion, because I want to turn to a different topic.
I take objection to other parts of the Bill but it is Clause 13 which sweeps away the right of students who need it to draw supplementary benefit during their Christmas and Easter vacations. The Bill refers to "certain students" and it is difficult to follow. It is a right piece of parliamentary gobbledegook. I do not know who the "certain students" are.
I might have been more satisfied if I had thought that the Government had consulted the National Union of Students. By that I mean not just telling the NUS when the Bill had been prepared, but discussing with it beforehand whether it was a practicality and whether the NUS


had objections. In the same way, I understand that the unions which object to Clause 4 would have welcomed genuine consultations instead of simply being told after it was all put together.
Students are unpopular with some members of the public partly because the media blow up odd cases and try to make people believe that students are scroungers. I was glad to hear one Conservative Member say that that was not true, that the overwhelming majority of students do a good job and deserve good grants. We need young people to continue their education and we should not take measures like this to discourage them.
The Department of Education and Science recently produced a publication called "Undergraduate Income and Expenditure", which makes interesting reading. That shows that the average term-time income of a student during the period under review was £577 when the grant was £605. In 1974–75, 81 per cent. of students in their second and later years at university or colleges of education had to take jobs in the summer. Their average vacation income was £182, of which 92 per cent. came from working and only 7 per cent. from supplementary benefits. That revelation firmly nails the lie that students are scroungers and layabouts.
Grants are means-tested. According to this DES publication, 84 per cent. of students receive a reduced grant because of the assessment of the parental contribution. But only about three-quarters of that 84 per cent. actually get the parental contribution. Some get a bit of it and some get none.
There are students of my acquaintance who believe that as a matter of principle they should not take their parents' money at that age, that they should stand on their own feet and look after themselves. However, whether it is because parents cannot afford to pay or for any other reason, a large number of students who are deemed to receive a contribution do not get it.
But they have to manage without that parental contribution. The Bill will not affect the summer vacation but only those at Christmas and Easter. At those times, students will have three choices. They

can live with their parents, if they can stay at home and their parents can make a contribution. They can take vacation employment. If neither of those choices is available, they can take supplementary benefit. Now, however, Clause 13 will remove that backstop—it is a backstop, not a first stop—of claiming supplementary benefit.
That is wrong. In present circumstances more and more students will be looking towards supplementary benefit because of the lack of jobs. Over the Christmas period in 1974 the Post Office took on 100,000 extra workers, many of whom were students. At Christmas 1975 the number was 50,000 because employment was already contracting. This Christmas there will be very few jobs available at all with the Post Office.
Post Office work at Christmas is traditionally a job for students and has always been so regarded. The few jobs which exist will probably go as priority is, rightly, given to those who have been unemployed for some time. The National Union of Students, which wants to defend the opportunities of its members, also believes that these jobs should go to unemployed people rather than to students on vacation. The Government estimate that Clause 13 will save about £1 million—an absolutely paltry sum considering the real hardship and deprivation which the clause will cause.
Clause 13 also refers to a change in the wording of the reference to cohabitation. The change is from
cohabiting as man and wife
to
who are not married to each other are living together as husband and wife.
I had to read that a couple of times to try to discover the Purpose behind it. As far as I can see, this is merely a matter of wording, of cosmetics.
I take it that it is an attempt by the Department to get away from the words "cohabitation" and "cohabiting". That is fine, but would it not have been possible, as we have the chance in this clause, and perhaps in a future Bill, to try not just to change the words but to get a proper and serious definition that is understood by the visiting officers of the Department?
The report of the Supplementary Benefits Commission several months ago


made some meagre attempts to change the way in which the cohabitation rule works, but as far as I can find out none of those recommendations has been carried out and visiting officers are still using the same criteria in deciding whether to withdraw the benefit. Many students, whether they have a lodger where they are living, or whether, as so frequently happens with the student population, several students are living together and sharing a flat, if they are in receipt of supplementary benefit, that can be withdrawn if the visiting officer suspects that two people are living in the flat as husband and wife.
I welcome the change in thinking that, has led the Department to try to get away from the word "cohabitating", I would rather that it made a proper attempt to get away from the rule altogether, and that if it could not do that to the mobility allowance, and to what it would make an attempt to define the meaning of the word, in a way that understandable to both officers and claimants.
This is a bad Bill and I go along with my hon. Friends who do not want to support it. It is no good the Minister saying that if the Government do not get this Bill they will have to take the money from elsewhere. We shall not be blackmailed in that way. I repeat that it is no good the Minister saying that if the Bill is defeated the money will have to come from some other group of people who are in receipt of some kind of benefit from the same Department. I am sure that my hon. Friends would join me in opposing that, too, because this is not the way to do it.
If we need to save money on this kind of scale, there are other areas from which it could be found; for example, by way of a wealth tax. I join my hon. Friends in hoping that the Minister will look at stage to take it back altogether.

8.23 p.m.

Mr. Eldon Griffiths: This is a unique and fascinating parliamentary occasion. I have heard almost every speech that has been made in this debate, and, with the exception of the speech of the right hon. Gentlemen the Secretary of state, the view from every quarter of the House has been

identical, namely, that Clause 4 shall not pass.
I say to the Minister of State, who is to wind up the debate and whose task I do not envy, that he has been given good advice from both sides of the House, namely, that it would be in the interests of Parliament as well as of the Government if he were to accept that the plain wish of the majority of hon. Members is that Clause 4 should be struck out of the Bill. The Committee should not waste its time considering it.
My right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin)was right to suggest that we should not oppose the Second Reading of the Bill, because this measure contains a number of useful and, I believe, humane requirements on which the Government deserve to be congratulated. I refer in particular to the mobility allowance, and to what is being done about students. My right hon. Friend was also right in taking exception to such things as Clause 19 and the infringement of confidentiality. I hope that the Minister of State will say something about that.
My right hon. Friend's main attack was on Clause 4, and I want to spend a few minutes on that. It is a badly winged bird, and the sooner its neck is wrung the better. I am sorry that the Secretary of State is not here. I am sorry, too, that he did not allow me to intervene when he was speaking. I wanted to commend him for his courage, because it takes courage for a Socialist Minister to bring this measure to the House, and I recognise courage when I see it. I also recognise his consistency, for it was he who introduced this difficult clause at the begining. He has shown courage and consistency, although I disagree with him.
I wanted to congratulate the right hon. Gentleman also on his newly-found enthusiasm for saving public money from the Welfare State. I wanted to congratulate him, too, on his newly-found anxiety to clamp down on what, on occasion, can be rackets in the Welfare State. I should be more impressed by the right hon. Gentleman's conversion to these views if he had not so eagerly supported a number of other spending measures; but I believe that the right hon. Gentleman is now on the right path.
I want to make two points. The first concerns the earnings rule, and the second relates to Clause 4. The gravamen of what the Government are suggesting is that they need to save money. The right hon. Gentleman made no bones about that. His proposition on the earnings rule was that preventing the proposed increase to £50 a week will save the National Insurance Fund about £60 million. That is a significant sum. But what bothers me is that Government Departments so often get their sums wrong. I have been a victim of this, and I want to give the House three examples of miscalculation on this specific matter.
In January 1975, the Government claimed that their earnings rule defeat in Committee would, on their own figures, cost £60 million in 1975–76. Subsequently they amended this to £50 million and admitted that some of that was due not to the earnings rule but to the increase in the number of pensioners forecast to retire early because of the economic situation. A miscalculation of between £10 million and £20 million was shown to be the case and admitted by the Government in Hansard.
Secondly, the Government claimed that the cost of moving from the £50 limit to complete abolition of the earnings rule would be £80 million. Yet in March 1976 they gave a completely different estimate, £20 million lower. The sum of £20 million had disappeared on their own estimate!
The third example is that the Government gave the cost of moving from the £35 limit to £50 as £35 million. That was in January 1975. Some allowance must be made because of the pension increases since then, which have been about 30 per cent., but now, in the Bill, the Government move this figure from £35 million to £60 million. We are left baffled about how these different estimates, all taken from ministerial replies in Hansard, can possibly have arisen.
What I am saying to the Minister of State—and I say it with some affection—is that those who sit on the Front Bench and speak for the Government are dependent on the best estimates that officials can provide. But too often they turn out to be wrong. I have given three specific examples where differences of

£15 million, £20 million and £25 million have been shown, on the Government's figures on the earnings rule alone, over the past 18 months. So I beg the right hon. Gentleman to be a little more tentative in his conviction that he will save as much as he suggests. He should admit that the parameters are a great deal wider than the Government have suggested in the Bill.

Mr. Tom Litterick: Does the hon. Gentleman not agree that the logical conclusion of his argument, whichhe has made with great conviction, is that if the Government's purpose is to bring about a saving and the saving is not worth the paper it is written on, the justification for the measure disappears?

Mr. Griffiths: I was dealing with a specific point. I shall come to Clause 4 in a moment. What I am suggesting is that in these areas of vast expenditure the Treasury and spending Departments often have wide margins of error. The right hon. Gentleman made no bones about this Bill. He said that it was designed to save money. I am expressing my doubts, on the evidence of mistakes already accepted, that it will in fact save the specific sum suggested.
There is no need to go over much of the ground on Clause 4 again. But the Secretary of State confused principle and practice. He started by telling us that many occupational pensioners get less than £25 and therefore they need not worry; they would not be caught. As examples, he mentioned some lower-paid Post Office workers, and it is true that their occupational pensions are less than £25, and therefore will not be affected. At the other end of the scale, the right hon. Gentleman told us, there were quite a lot of people over the £35 mark. They were, he suggested, the fat cats, and since, in his view, they were pretty well off, there was not very much to worry about in their case. That may be fair enough, but the right hon. Gentleman said nothing about those in between the £25 and £35 bands. These are the people who will be worst hurt and who will feel most deeply about it.
I declare an interest here, in the Police Federation, for many of those affected will be retired policemen. The police are


unique in this area in several respects. First, they are required to pay more of their salary towards their occupational pension than any other part of the public sector. They are required to pay 7 per cent., which is a sizeable amount. The maximum that the majority of the public sector pays is 6 per cent., for example, the teachers.
Secondly, the police are unique in that they are compulsorily retired not at 60 but after somewhere between 25 and 30 years' service. Since a policeman usually joins at the age of 18 or 19 he is eligible to retire with a pension by his late forties or early fifties. He is required to do so because after 30 years' service he is, frankly, no longer physically fit enough to accept the burden of the job.
That is perfectly reasonable, and well understood. What it means is that a large number of policemen are compulsorily retired when they still have ahead of them an average working life expectancy of nearly 20 years before they reach 65. During that period they are certainly available for work. The overwhelming majority want to work, and most of them do. But inevitably there are some who are unemployed, particularly in difficult times. They meet the "availability for work" test but they are unemployed because there are no jobs. Further, they may be unemployed for long periods because they have been compulsorily retired early. In such a case it is hard for a man finding himself between the £25 and £35 bands to have his unemployment benefit docked for long periods of time.
Let me cite two examples. The first is where a police officer of, let us say, 59, having reached a fairly good rank—chief inspector or superintendent—has fulfilled all the requirements of the National Insurance Acts, has paid up to the hilt for his occupational pension, is available for work, wants to work, needs to work but cannot get a job. It is very unfair on that man to take away part of the unemployment benefit which he had been led to expect he could count on.
The second case is more serious, because it is more common. Most policemen, having retired early, get another job. They are usually well sought after and go into a second career, starting in

their middle fifties and continuing for another 10 years or so. At that point they start to pay national insurance all over again, and may well pay towards a second occupational pension. But in their second employment, too, they may also become redundant. The firm may collapse. They may be sacked. They then find themselves in a situation in which they may have paid towards two occupational pensions, they have paid their national insurance in two separate sets of circumstances, they have become unemployed, and still under this Bill their unemployment pay is docked.
There will be, inevitably, very hard feelings about this. I quote the words of the Police Federation:
The Police Federation does not condone or excuse any abuse or misuse of the Social Security arrangement, all of which can be dealt wtih by enforcement of the existing powers held by the Department. However, we must make it perfectly clear that our members strongly object to the proposals that, following retirement from the police service, there should be the withholding of unemployment benefit from life long contributors to the National Insurance Scheme".
That objection is not confined to the police service. It is widely shared throughout the public sector trade union movement.
I am glad to support a Second Reading for the Bill, because there are elements in it which are necessary and just, but I believe that Clause 4 fails on these specific grounds; first, it discourages thrift, because people who have saved money via occupational pension schemes will be treated worse than those who did not save; secondly, it is discriminatory, be-because, manifestly, women are treated much better than men; thirdly, it is unfair, because a person who has saved cash and invested it will be better off than a person who has invested in his occupational pension; and, finally, it clobbers the good guys along with the bad guys.
There is a case for withdrawing benefit, on grounds of abuse, from occupational pensioners who from time to time do not really want to obtain work. Those are what I call the bad guys. But this argument certainly ought not to apply to those unemployed persons who are genuinely looking for work and simply cannot get it. These are the good guys—but this proposal exercises no discretion, as it


ought to do, between the genuinely unemployed and those who are trying to fiddle the system.
I said at the beginning that Labour Members had given the Government some good advice, for example, that the word "cohabitation" be struck from the statute book. There has been a strange kind of political cohabitation in the House today. It would be a misuse of the time of parliament to pursue into the Committee stage a clause which has been so riddled with holes by all sides in the debate. Manifestly, the demonstrated will and speeches of all who have spoken is that it will not pass. The right hon. Gentleman will not damage his parliamentary reputation or endanger the Government's survival if he recognises the logic of the situation. So let him withdraw Clause 4 now.

8.39 p.m.

Mrs. Audrey Wise: What my hon. Friends have said about the principle of the pension provision is right. As for the factual background to Clause 4, the House has been less well treated than it should have been as regards the production of basic facts.
When legislation is being introduced, more information should be provided. If a Bill contains a clause dealing with occupational pensioners between 60 and 64 who receive unemployment pay, I should have thought that the Department would know how many people were involved. However, I have been told:
The information is not readily available in the form requested".—[Official Report, 1st December 1976; Vol. 921, c. 155.]
I did not choose the form. The Department chose the form. It is not unreasonable to expect such information to be available.

Mr. Orme: My right hon. Friend the Secretary of State for Social Services gave the figures, which we have obtained since that Question was asked by my hon. Friend. We are talking about 16,000 occupational pensioners who would be partly or wholly excluded. That also answers the question which was posed by my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker).

Mrs. Wise: I received the answer only yesterday. It is therefore crystal clear that the Bill was prepared before the

figures were known. That was putting the cart before the horse. I should have been given the figures yesterday and not have had to wait until this debate.
I cannot understand why the Secretary of State is able to say that people with occupational pensions of more than £35 will provide the bulk of the saving, as yesterday I was provided with the information that altogether there are 7,000 people between 55 and 64 who are in receipt of occupational pensions of more than £35 a week and who are drawing unemployment pay. It is clear that it is expected that the bulk of the saving of £14 million will come from fewer than 7,000 people. I should welcome more background information.
I know that on Second Reading it is customary to speak to the principle of the Bill and not to the details of individual clauses. I should have followed this practice had there been a discernible principle behind the Bill. As there is not, I have no alternative but to deal with it in a rather scrappy manner.
The only thread running through the whole affair is the July measures. As one who was opposed to the July measures, I believe that this is a very weak thread.
On Clause 13, the Secretary of State quoted the Supplementary Benefits Commission as saying that it does not
see student support as a proper function of the supplementary benefit scheme.
It is true that that was said in the report of the Supplementary Benefits Commission for 1975, which was published in September. It would have been fairer, however, if my right hon. Friend had started the quotation rather earlier. I shall read the whole paragraph:
However, so long as the students' grant fails, during vacations, to provide the minimum level of income which Parliament has laid down in the supplementary benefit scheme for society generally, and in so far as students are able to satisfy the normal qualifying conditions, the Commission sees no justification for excluding them from a right that is available to others.
That passage, precedes and modifies the quotation made by my right hon. Friend.
There was a genuine criticism which could have been levelled at students' claims for supplementary benefit for the Christmas and Easter vacations. That objection or criticism was based upon the


fact that it caused the supplementary benefit office a great deal of work. It is quite clear that to have students descending in large numbers on the DHSS office at Christmas and Easter caused them a great deal of work. But Clause 13 cannot be intended to remedy that, because it has already been remedied.
The Supplementary Benefits Commission report states:
The impact of student claims on the administration of the supplementary benefit scheme should be significantly reduced in 1976–77 when, as a consequence of changes which have been announced in the arrangements for student support, it will no longer be necessary or appropriate for the majority of students to claim benefits for the short vacations.
The Commission made that statement because in the House on 23rd February the Secretary of State for Education and Science announced a change in the pattern of student grants. The student grant now includes a notional portion during the short vacations that exactly corresponds to the basic supplementary level payment for a single person. If all that a student is entitled to claim is the basic supplementary benefit, he no longer makes that claim because it is no longer necessary or appropriate.
Even without Clause 13 the impact of work within supplementary benefit offices will be substantially reduced this Christmas. With whom are we left as claimants? We are left with those who are entitled to receive more than the single person's required income. Who are they? They are blind students, who would get an extra allowance as blind people. They are householders, who would be able to claim more. They are students with children, who also would be able to claim more. That latter category may be single-parent families or two-parent families. Therefore, there are the three categories—householders with continuing rent commitments, blind students and people with children. They are the people covered by Clause 13.
This is where the mind boggles. How can it be said that it is fair to attempt to save £1 million at the expense of those categories of students? It is not even students in general: it is students with special needs. We were told by my right hon. Friend that measures would be taken to shield those in special need. My

mind boggles even more. If they are to be shielded at the same level, or substantially the same level, as the supplementary benefit entitlement, where are the Government to get the £1 million? What is the use of taking it away by the implementation of Clause 13 and then giving it back out of the goodness of their heart?

Mr. Orme: My hon. Friend will realise that the main saving is the £14 million of unemployment pay which we do not need to put before the House.

Mrs. Wise: So the main purpose of Clause 13 is not to save£1 million as described in the Financial Memorandum. At nearly 8.50 p.m. we are told that the main purpose of Clause 13 is not to save £1 million, as described in the Financial Memorandum, but to save £14 million through the non-payment of unemployment benefit, which a student would not receive in any case unless he were paid up, unless he had a contribution record, and was registering for work but could not get work.

Mr. Orme: This point was made by my right hon. Friend. It has been public knowledge for some time. The clause excludes students from unemployment pay because they have been signing on in the short vacations. It was felt that unemployment pay was not for that purpose. However, in the long vacations they can claim supplementary benefit or unemployment pay.

Mrs. Wise: Will my right hon. Friend make the position clear? Is it as a result of Clause 13 that students are being deprived of £14 million unemployment pay?

Mr. Orme: It will be done by regulations. It is nothing to do with this Bill.

Mrs. Wise: The regulations are entirely reprehensible and ought not to have been brought in. But, as we have not had an opportunity of voting on the regulations and as this matter is not concerned with this Bill, it is not relevant. Therefore, I am entitled to revert to the claim that we shall save £1 million—

Mr. Ennals: The decision, which covered both supplementary and unemployment benefit, was that social security benefit was not the proper method of support for students during


short vacations. The proper method for student support comes from educational grants. Certainly during the long vacations students could be said to be available for work. Therefore, they will be entitled to unemployment and supplementary benefit. It was a joint decision. One part requires legislation. That is the part relating to supplementary benefit. The other part can be effected by Order in Council. That Order will come before the House and my hon. Friend will have an opportunity of voting on it.

Mrs. Wise: Is my right hon. Friend telling us that we are still talking about £1 million as the estimated saving on supplementary benefit?

Mr. Orme: That is correct.

Mrs. Wise: So I revert to the statement that the people from whom that sum of £1 million must come are blind students, student householders and students with children. They are the people who, in the main, would be entitled to more than the basic supplementary benefit level. They would be the only people left entitled to claim supplementary benefit.
If we are to save £1 million from them, it is entirely wrong. If we are not to save £1 million from them because we are to have a different scheme, we are wasting our time. If there is to be a partial giving back, it is still utterly reprehensible, unjustifiable and a sheer waste of effort.

Mr. Bryan Gould: It is ludicrous to talk about hardship cases in this context. Every case where resources are not equal to supplementary benefit entitlement is a hardship case. The objection is that the measure does violence to the basic principle of the Welfare State—that no one should be allowed to fall below a State defined poverty line.

Mrs. Wise: Exactly. I entirely agree with my hon. Friend. If we were dealing with a measure to rationalise the many anomalies in the grants system and to put it on a proper subsistence basis, it would be a different matter. But we are not presented with a measure such as that. We are told that supplementary benefit is not the way to deal with

student hardship, but we have nothing before us from either the DHSSor the Department of Education and Science to deal with that hardship. This is cloud-cuckoo land. It is intolerable, and I am sure that it just will not be tolerated.
I believe that my right hon. Friends on the Front Bench do not want to take the bread out of babies' mouths. So why do they do this? Perhaps there is some thought running through their heads that there is a "deserving" and an "undeserving" poor among the students. For instance, it seems that we have got over the merits and the question of hardship in the case of one-parent families, so that the lone parent will find that the safety net, having been taken away, is brought back. But children of two parents are still children and since those parents have to fulfil the income requirements of the supplementary benefit scheme, what right have we to say that their children are not entitled to be treated in the same way as children in any other family?
Incidentally, as has already been said, students are not all 18-year-olds. I am pleased that one part of the Bill which is fairly well and comprehensively drafted makes quite clear that the DHSS realises that not all students are 18-yearolds. Clause 13 recognises this fact—
Without prejudice to Section 7 of this Act, a person under pensionable age who is attending a course of full-time education …".
That shows that the Department realises that not all students are 18-year-olds. Students can come in any shape or size, and certainly in any age.

Mr. Gerry Fowler: Is my hon. Friend aware that in the Education Act 1975 the same Government made it easier for mature students to enter higher education by removing the educational qualification which was otherwise necessary for the payment of grant? It is now proposed to take action that would disbar many of those same students from higher education.

Mrs. Wise: I accept that absolutely. I am one of those who welcomes the bringing of mature students into education. I believe that education should be lifelong. We should get away from the idea that people start school at 5 years old, go through the education process and then have a cut-off and never open a


book again. I believe that students should come in as many varied ages as possible. But they are apt to bring children along with them. It is a fact of life.
I know that the Department of Education and Science thinks that students should not have—or certainly should not accumulate—dependants while they are students. I know this to be so. It is regarded as fecklessness in the extreme for students to have children. So there may be an idea that, under a different scheme, there will be a distinction drawn between one-parent and two-parent families. We should reject that.
We should reject anything which is lower than the supplementary benefit scales, because we have already established many times that that is the poverty line. If people should be entitled to supplementary benefit and if their number has been reduced, as it has, to only those who would be entitled to something more than £11·35, I appeal to my right hon. Friends to withdraw Clause 13 as well.
When we are called on to vote on the clause, we shall not know what we are voting on, except that it could apply to anybody under pensionable age, because the regulations to be made by the Secretary of State will specify the course and then state whether a person on that course is to be treated as being on that course.
One cannot parody the expression used in the Bill. It states:
The Secretary of State may specify by regulations made under subsection (1) above the courses which are courses of full-time education for the purposes of that subsection and the circumstances in which a person is or is not to be treated for those purposes as attending such a course.
A person is either on an educational course or he is not. I am worried about whether those words hide some mysterious discrimination. I like things set out clearly so that everyone knows what is meant, everyone knows where he is and everyone is treated on the same basis.
It should not be a further task of the Secretary of State to decide whether to treat a student as a student. The Bill states:
regulations so made may authorise the award of supplementary benefit to a person

who would be entitled to it but for this subsection.
That means that this clause will take away benefits and the same clause will authorise the Secretary of State to give back the benefit, or any part of the benefit, that he fancies. That is not up to the standard I expected from Parliamentary draftsmen when I entered the House two and a half years ago.

Ms Maureen Colquhoun: But it must be now.

Mrs. Wise: We live and learn.
The Bill is not properly drawn or factually well based. It will either not save more than 2½p or it will save money at the expense of those who can least afford it.
I urge my right hon. Friends to reconsider. I ask them to reconsider the statement made by the Secretary of State. At least he said that the clause would not be operative until 1977–78. I suggest that if the Government began to follow the alternative Socialist strategy advocated by so many of us in the House, they would not have to save £1 million by a year come Christmas. Surely that is another good reason for thinking again and withdrawing this utter nonsense.

9.2 p.m.

Mrs. Lynda Chalker: I shall leave the Minister to deal with the speech made by the hon. Member for Coventry, South-West (Mrs. Wise). In my experience this is the first time that only one person—the Secretary of State himself—has welcomed a clause in a Bill. The Secretary of State welcomed Clause 4. Precious few other people have welcomed that, or Clause 6. Someone suggested that the Bill should have been called "The Supplementary Benefits (Largely Irrelevant Provisions) Bill" because it was felt that it would do little to save money where it should and miss out too many of the chances which could be taken.
The Government appear to think that the Bill will stop abuses. I cannot believe either that that is its main purpose or that it will succeed. The Secretary of State said that he was about to save £75 million but already the hon. Member for Coventry, South-West and the hon. Member for Birmingham, Perry Barr


(Mr. Rooker) have thrown doubt on that figure.
It is sad that we should have missed out on the chance to deal with some of the small issues that could have been tackled in the Bill and which could have led to net savings. Perhaps tonight is not the time to discuss in detail all the provisions, but we shall look forward to doing that at a future stage.
The hon. Member for Rochdale (Mr. Smith) became excited because his amendment had been called. Has he realised that by succeeding with his amendment he will throw out the industrial death benefit changes for dependants of persons contracting serious diseases whilst at work. The hon. Gentleman would throw out the easement of conditions for benefit under the Industrial Injuries and Diseases (Old Cases) Act. He would throw out the slight improvement on the mobility allowance. None of his taunts on the student situation will persuade me that it is right to utter words in the House in order to buy student votes on an occasion such as 2nd December. I think that the hon. Gentleman is under a spell, because he does not seem to realise that there was not much difficulty for the then Opposition in 1971 in rejecting Clause 7 of the then National Insurance Bill, because feeling in the House then was—as I suspect it is tonight on Clause 4—absolutely unanimous, apart from the Government Front Bench.
I should like to deal first with what is a very small issue, perhaps, as compared with some of the issues raised tonight—the change in the cohabitation rule that will be effected by one of the later clauses of the Bill. I was very pleased to see that change. I realise that it does not go as far as the hon. Member for Barking (Miss Richardson) would like it to go, but it is important to remember that there are now 700,000 one-parent families in real need. Many of them live with relatives not of the same sex, and the word "cohabitation" has conjured up in so many people over so many years something that is obviously not happening in the household. I welcome Professor Donnison's recommendation and the Government's implementation of it in the Bill.
We must remember, on the occasion today of the fourth annual general meeting of the National Council for One-Parent Families, that the problems that one-parent families face will be only marginally eased by the upratings that we had last month, and that there are, each month, a further 3,000 having to claim supplementary benefit. Therefore, I welcome this small amendment, but I want to keep in front of the House our very real concern about this group in our society.
I turn now to the mobility allowance. We have had many discussions, debates and disputes over what should be done. We know that the Government would like to get out of hardware if they felt that they were able to do that. On 23rd July we heard from the Secretary of State that there were likely to be changes. At first we thought that trikes were to go altogether. We have had the mobility allowance, which we welcome. According to one of the officials in the Department, we are now having a real rethink yet again, because he said in a letter to me only last week,
we shall assess the extent of the need for specialised vehicles for the remaining tricycle drivers and see what alternative invalid vehicles are available on home and world markets.
I accept that that was going to happen in any event, but I think that it is time that we got down to a wider discussion —I hope that we can do so in Committee—on the whole question of mobility, as my hon. Friend the Member for Wells (Mr. Boscawen) said. Although we welcome this small improvement, it creates a further anomaly for the non-driver, who will still lose out because he has no trike to give up for mobility allowance, which will continue after the retirement age.
There is a further question that arises on this subject. We have had a great deal of uncertainty. We expect from the Government some small further steps, when other matters improve, towards extending the mobility allowance to some other people who feel unreasonably deprived of it in comparison with those who will be in receipt of it. However, that cannot come at present. Of that we are well aware.
I turn to the thorny subject of students, about which we have heard much this evening from Labour Members below the


Gangway. There is no doubt that the Secretary of State spoke very quietly when he referred earlier to the unemployment benefit not being available. I am not surprised that not everyone had realised that this was to come up in regulations. However, the speeches that we have heard tonight show the grave doubt felt by many people simply because we have not had the regulations for the hardship allowance brought before us at the same time as this change.
As my right hon. Friend the Member for Wanstead and Woodford (Mr.Jenkin) said, we agree in principle that the financing of students during their student days should be a matter for the Department of Education and Science, but to have this put in legislative form without knowing any of the details of the so-called hardship allowance is asking for trouble. The Government have only reaped what they truly sowed.
The plight of students is often overemphasised in certain quarters, but we know that there are special problems for some and we look forward to hearing from the Minister of State how the hardship allowance, whatever its value, from the DES will mitigate the situation caused by the removal of entitlement to supplementary benefit.
I shall be interested to know also whether the hardship allowance will be akin to something which used to exist called the holiday grant for those who realy intended to study in the vacation. If it is, it will need to be regularly up-rated if it is to have any continuing value. That is something on which we have no detail at all.
One of the two main issues which divide the Front Benches on the Bill is the earnings rule. At the turn of 1974 I was present during the long and involved debates on this matter in Committee, when we sought a right for those who continue working during the five years directly after the statutory retirement age to retain an increasing amount of their earnings. My hon. Friend the Member for Rushcliffe (Mr. Clarke) said on 29th January 1975:
the rule is a direct financial penalty on the efforts of such people."—[Official Report, 29th January 1975; Vol. 885, c. 483.]
He was referring to men between 65 and 70 and women between 60 and 65.
The history has been outlined in the House. The Conservative Opposition, with the help of the hon. Member for Islington, South and Finsbury (Mr. Cunningham) drove the first nail in the earnings rule coffin in January 1975. His hon. Friends joined us to complete the nailing down of the lid on Report. At that time, 20,000 people were losing much hard-earned cash that they needed. The figure has now gone down to 11,100, we are told, but the earnings rule was a consequent loss of independence and the reinforcement of an outdated idea, and we started to get rid of it.
We did not get the real amendment we wanted in that Committee, but even then we were going in the right direction. Because the figures are in grave doubt, we need to look at this matter carefully in Committee. I think that it was the hon. Member for Birmingham, Selly Oak (Mr. Litterick) who, referring to the figures quoted by the hon. Member for Coventry, South-West, said that if it was in such a muddle we should not support it at all. But it is our duty to sort it out.
Because of their sheer financial mis-management, the Government are seeking to enforce this reduction of the earnings rule on people of retirement age for five years thereafter for the sake of £60 million. I say "£60 million" in good faith, because that is what is written into the published Bill. We have already heard, however, from my hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths) and others of a series of contradictory parliamentary answers to myself and my hon. Friend the Member for Rushcliffe about the earnings rule and relaxing it.
It seems that the Department are still revising it and we are unsure what the real cost will be. I know that the Minister will agree that the main cost will be seen if pensioners who currently defer their pension plans do not do so in future.
On 8th March, the then Minister of State said that the current deferments in March 1967 were 120,000, of whom 70,000 had dependent wives. Under the £35 rule which came into operation last April the figures fell to 70,000 current deferments and 45,000 who had dependent wives, producing a cost of £110


million in 1976–77 for the abolition of the rule.
We have had various other estimates, most of which are contradictory both in numbers and in costs, and tonight is a first-class chance for the Minister for Social Security to put the correct figures on the record. I must remind him that there have been, even in later days, figures which do not add up. I hope that he can reassure us that we really know what we are doing with the proposals that he brings forward tonight. Until we are satisfied that we have sorted out this matter we shall reserve judgment on the Government's proposals.
There is one further matter on which the Minister must comment. On 29th January 1975, we were given a total abolition figure of £80 million at April 1975 rates. On 2nd March of this year the question was asked again and it was revealed that that figure had come down to £60 million at November 1975 rates. The House must forgive me if I am wrong, but logic guides me to think that the £60 million should have been higher even if some of the pensioners had retired due to the state of the economy. I shall welcome some clarification on those figures.
I say of this measure that it is wrong to deny active elderly people the chance to avoid dependence on supplementary benefit which the enhanced disincentive to work causes. It is wrong to use elderly people, who can provide useful services in work, as scapegoats for the state of the economy and this Government's record of unemployment. With this clause, we have just 11,100 people —fewer than 3 per cent. of the 500,000 people of pensionable age—in work. Many are doing part-time work to avoid the rule. Many others are asking not to be paid more so that they can avoid the rule.
I think that we should be able to retain the good work done in 1974 and 1975 and not cause people to seek to get round the rules. That, surely, is not the reason for which we legislate in this House.
Whilst I am dealing with this matter, perhaps I might draw attention to the fact that we have not had from the Government one word about the effect on the

wives of invalidity pensioners. The Minister will know from questions which have been asked in the House and from discussions that we have had at other times that invalidity pensions are non-taxable and, therefore, that the taxation liability is not reduced. It means that the wife of an invalidity pensioner earning between £35 and £39 per week is effectively taxed at a marginal rate of 85 percent. Once her earnings rise above £39 a week, the marginal taxation rate is 135 per cent. That seems to be totally crazy. It is a contradiction of the Government's own philosophy.
The Government introduced the invalid care allowance to encourage self-help in families. Surely the wife of an invalidity pensioner is trying to carry out that very same philosophy. It is not enough to say that these people need to be those on whom we save, even though we accept that savings have to be made. Surely it is better for them to care for their invalid husbands in their own homes by their own effort than to have them going into residential care at a far greater cost. If the Minister cannot do anything about the earnings rule for ordinary pensioners, he should at least undertake to look again at the situation of the wives of invalidity pensioners.
I have said already that there have been many different figures and that many arguments have produced much lower costs. In fact, I even went through the figures on one occasion and came to a net cost for the removal of the earnings rule of £4 million. I shall not go through it again now, but we must get the figures straight.
I turn now to the one issue on which everyone other than the Treasury Bench seems to be totally united. It is a victory for common sense that that should be the case in this House. The hon. Member for Ealing, North (Mr. Molloy), my hon. Friend the Member for Wells, the hon. Member for Islington, South and Finsbury, and many others have referred to the unfair restriction on unemployment benefit for occupational pensioners, at a saving of £4 million.
I believe that these proposals have been brought forward for three main reasons. First, the Government are desperate to save money. Secondly, they are more worried than they care to admit about the


recent discussions on the abuse of benefits. Thirdly, they regard savings and occupational pensions almost as new income and, worse still, some of their supporters regard it as unearned income. But we are not dividing the House on that issue tonight.
Objections to such a measure have been raised by official Oppositions of both political complexions in the past. In 1971, the former right hon. Member for Kingston upon Thames, now Lord Boyd-Carpenter, together with the right hon. Lady who is now Secretary of State for Education, opposed a far less onerous proposal. With good common sense they defeated Clause 7 in that Bill. The right hon. Lady encapsulated what the House felt about the attempt to restrict payment of unemployment benefit to occupational pensioners, when she said that the Tory Government had over-egged the pudding in pursuit of a small number of people who had abused the system.
There was grave worry about that Bill, which came from a report of the National Insurance Advisory Committee. There was one lone voice on that Committee—the voice of Lord Collison, a former chairman of the Supplementary Benefits Commission, who encapsulated our fears when he said:
What is there to prevent the extension of this principle"—
He referred to the stopping of national insurance benefit—
to sick pay, retirement pensions and other national insurance benefits?
We should heed his words today. They are as true now as when he said them in 1968.
We have heard from the Post Office Engineering Union and many other groups of workers who have put their objections clearly. Members of many occupational pension schemes have no alternative but to provide for their pensions through their pay, and it is a condition of service from which they cannot escape. We have heard of nothing that will alleviate their plight. They cannot take a fuller pay packet; they cannot save through the Post Office, banks or building societies. There are many workers, such as those who work in Her Majesty's dockyards who, after 40 years' service, do not have the choice to carry on working. Their basic occupational

pension starts at £29 per week and my hon. Friend the Member for Bodmin (Mr. Hicks) will confirm this.
We have heard from my hon. Friend the Member for Bury St. Edmunds about the situation facing the police. I gather that it also applies to some people working in the fire service. All these examples show the inequity of the Government's scheme.
The Government are taking the incentive out of saving for good occupational pension schemes just as their failure to curb inflation is making it harder for people to save. They are discriminating against people in receipt of occupational pensions of between £25 and £45 per week.
As the hon. Member for Coventry, South-West said, we do not know exactly how many people will be affected, but the Secretary of State said today that it would he 16,000. That may seem a small number, but it could prove to be the thin edge of a very large wedge if the Government decide to restrict, in this way, payments of benefits for which contributions have been made. There are many other calculations that could be made, but we all agree that abuses in the system must be halted.
There are many who register for unemployment in order to preserve their entitlement to a full retirement pension. If they are to be allowed to preserve that right at the age of 60 for women and 65 for men, some special provision will have to be written into the Bill in Committee, since there is none at present. Perhaps that comment underlines one of our worries. A number of Government amendments will be needed to make this Bill work at all, even on those elements which we feel may have to remain.
What analysis is taking place to determine the demand for work among unemployed occupational pensioners? If, as I suspect, it is the abuse which the Minister is trying to curb in order to save £14 million, there is no point in bringing forward this scheme, which will do very little about that problem.
The scheme will encourage people to take lump sum payments from occupational pension schemes to get round the rules. It will not curb the abuses which


the Secretary of State suspects are contained in the scheme. Has the right hon. Gentleman looked at the rules on the availability for work which operate in Australia and other countries? That is the way to curb abuses.
I was challenged by the Secretary of State on Tuesday to find a way round this problem. I shall seek to help him, but the Government, with their Civil Service resources, should also be doing something to correct the abuses. They are unfairly discriminating against people who have saved for occupational pensions, and when a person has put money aside throughout his working life, a pension of £25 or £35 on retirement is not very generous.
The Bill is administratively cumber-some, and for occupational pensioners it is blatantly unfair. It will do nothing about those who abuse the system, but it is already creating a great deal of aggravation because of its dubious abandonment of the national insurance principles. We are bound to ask, if the Government abandon this, what goes next? The Bill is a disincentive to the building up of occupational pension schemes, and I think that the House can do better than the Government on this matter. We shall fight the clause tooth and nail, and I think that every hon. Member on the Government Benches below the Gangway will be united with us.
The Bill is irrelevant to the needs of the occupational pensioner and goes against the Government's own 1975 Act. It is irrelevant to elderly people who want to work. It does a little for one section —the disabled—in terms of mobility allowance, but it does not sort out the problem of students who will need further help, because the Bill tells only half the story.
The Bill sets out to save £75 million, according to the Secretary of State, but as it stands it will create more dissension and an atmosphere of blatant unfairness in our society, and this worries me.
There is blatant unfairness to the occupational pensioner and a disincentive, because of the earnings rule limitation, to the many active elderly people who could care for themselves for much

longer if they were allowed to continue working. There are other anomalies, too.
Instead of this Bill, it would be nice to see the House revising tax allowances in order to make sense of the benefit taxation nightmare and it would be good to see us simplifying the whole area of benefits for the sake of claimants, taxpayers and the over-pressed departmental staff. It would be good to see the House working towards a system of proper support credits to those in need while encouraging those who can to make greater personal provision by incentive to help weaker people.
We look forward to a thorough revising Committee stage, when all hon. Members can use their practical common sense to put more sensible measures into this dog's dinner of miscellaneous provisions.

9.30 p.m.

The Minister for Social Security (Mr. Stanley Orme): I congratulate the hon. Member for Wallasey (Mrs. Chalker) on making her first speech from the Opposition Front Bench. Having said that, I find it odd to be lectured by the hon. Lady on the Welfare State. I note the hypocrisy of it, particularly when we should like to know where the Conservative Party, if it were in office at the moment, would find its £5 billion cuts.
I can assure my hon. Friends that, having taken part in discussions in recent days, I can well imagine where the Conservative Party would look for cuts. It is to the Government's credit that the July measures excluded any cuts in the major social services. In fact, the upratings went ahead a fortnight ago in November. The Government also excluded overseas aid from the cuts. Therefore, the main social security benefits—which run to £10 billion expenditure a year—and overseas aid, were excluded.
My hon. Friends will know that the cuts have not fallen on the main benefits but on the items that are before us tonight. As my right hon. Friend the Secretary of State explained, these cuts had to be made in order to find this amount of money. I know that some of my hon. Friends are opposed to the cuts in principle. I remind them that, faced with this situation, the Government could have made cuts in far more damaging areas. But they did not. We protected the people really in need in our society.
I should like to answer some of the questions asked by the right hon. Member for Wanstead and Woodford (Mr. Jenkin). He referred to the current review of the supplementary benefits scheme which my right hon. Friend announced some weeks ago as being undertaken by the Department. The right hon. Gentleman hoped that the object of that review would be to remove a substantial number of people from supplementary benefit.
All I can say to the right hon. Gentleman and to the House is that the review is going ahead. It may be possible to bring certain aspects of the review before the House without waiting for the full report. Some of the aspects are extremely detailed but as soon as we have any facts and information we shall put them before the House.
The right hon. Gentleman also referred to Clause 19(5) which amends Section 164 of the Social Security Act 1975 so as to permit disclosure of earnings information by the Inland Revenue to the Manpower Services Commission, the Employment Services Agency and the Training Services Agency. The Government are as concerned about confidentiality of records as the right hon. Gentleman. It makes for sensible administration to extend to Government agencies information held by the Department where the Department and the agencies are carrying out similar functions.
My Department obtains earnings information from the Inland Revenue by extracting it from employees' PAYE deduction cards used to record national insurance contributions. The Department then makes use of this information to calculate earnings-related supplement due to social security benefits.
The agencies carry out much of the same functions in this context and it is only common sense and practical administration to extend the disclosure power. I would stress that it is only an extension of Section 164 and not a new principle that the clause proposes.
The right hon. Gentleman referred to the letter of 4th October from the Chairman of the National Association of Pension Funds to us suggesting a number of desirable improvements in the occupational pensions legislation, and he asked about the Government's intentions with regard to pay policy and pensions. As the

right hon. Gentleman probably knows from the Prime Minister's speech, it is still the Government's intention at the earliest opportunity to go ahead with legislation to provide for industrial democracy in this field. On the second aspect, that of being allowed to negotiate, the Government still have in mind the deadline of April 1978 for the new pension scheme. The Chancellor of the Exchequer is actively considering the matter, and again as soon as we have any information it will be reported to the House.
I propose to deal first with the earnings rule, because in a sense this has given rise to the least controversy this afternoon, certainly amongst my hon. Friends This aspect raises the largest part of the revenue for which the Government are asking from this Bill. The proposal to uprate the earnings rule to £35 with indexing is a sensible suggestion. It will not penalise people who are taking work and, as my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham) accepted, the Government are committed to the removal of this in its entirety when the economic situation allows. My right hon. Friend made that clear, and I emphasise it.
My hon. Friend asked how we arrived at the net figure of £45 million of savings which the hon. Lady the Member for Wallasey challenged this evening. The hon. Member for Bury St. Edmunds (Mr. Griffiths) said that figures produced by Government Departments are often wrong. I am the first to say that they are not always right, but they are not always wrong, either. Because this has become a controversial issue, we have looked at it very carefully indeed. In Committee I shall be able to give hon. Members and the right hon. Member for Wanstead and Woodford more information, and I think that he will find that the net figure of £45 million is fairly accurate.
The second area of debate that has rightly aroused a great deal of passion is that of student and supplementary benefits. I listened carefully to all the speeches, and I want to deal in particular with what was said by my hon. Friend the Member for Coventry, South-West (Mrs. Wise). There has been some confusion, and I am the first to admit that the wording of the clause is not easy for laymen or even experts to understand.
It is our intention that this provision should help those whose inescapable commitments mean that the £11·35 vacation element in their grant is inadequate. Among those for whom we shall consider providing help by means of the hardship scheme are students in board and lodgings, and those with dependants. What we shall seek to ensure is that for the eight weeks of the two short vacations students will not be without financial support.

Mr. Mikardo: I ask my right hon. Friend to come back to the point that we tried to put to the Secretary of State. If the hardship scheme supplies enough assistance to be equal to that which would be supplied by supplementary benefit, what is the point of having it instead of the benefit? If it does not supply that much, or if the conditions are more rigid, is not this a violation of the universal rule that nobody must fall below the safety net?

Mr. Orme: My hon. Friend has reinforced the case made by my hon. Friend the Member for Coventry, South-West. I want to deal with that point because it is central to the argument. I was asked about the hardship cases and the administrative details. We have not worked this out. In a sense this is a matter for the Committee. I have something to say to my hon. Friends in a minute about this which I hope they will find acceptable. These calculations have to be done in conjunction with the Department of Education and Science.

Mr. Patrick Jenkin: The right hon. Gentleman cannot get away with that. This policy was announced by the former Secretary of State for Education last February. It is now December. To come forward with a Bill proposing these changes and to give us no details of the proposed replacements is shameful.

Mr. Orme: Discussions have begun and are currently taking place. The information I have received in the House today will be ofconsiderable value in those discussions. The Government have listened to the debate and have taken note of the serious points raised.
Reference has been made to severely disabled students. This, I think, will meet the point raised by my hon. Friend

the Member for Bethnal Green and Bow (Mr. Mikardo) about putting people back into the scheme. Regulations will be introduced to ensure that their present access to supplementary benefits is preserved. The same will apply to one-parent families where the parent is a student.
I come now to the central point raised by my hon. Friend the Member for Coventry, South-West. I listened to her arguments closely andI believe that she put forward a devastating case. My right hon. Friend and I are prepared to look again at the clause in its entirety. Naturally, I can give no further commitment, but we shall look at all the aspects, all the anomalies that have been thrown up, and see whether it is possible to deal with them. I hope that this will meet the genuine argument that has been put forward.

Mr. Gerry Fowler: The difficulty my right hon. Friend faces relates to the purpose of this clause as it has become apparent. It seems that an Order will be laid excluding students from unemployment benefit but that they will still register for that benefit so as to draw supplementary benefit. The saving of £1 million is inserted into the Bill as a purely notional sum to justify the clause. That is the truth, is it not?

Mr. Orme: It is not necessary to register for supplementary benefit. People receive it in cases of need. I know my hon. Friend's concern about this matter. The Government will look at it in its entirety.

Mrs. Wise: Does by right hon. Friend mean that he will look at the principle as well as the anomalies?

Mr. Orme: The answer is "Yes".
I come now to the other main point that has been raised in the debate. That deals with the unemployment benefit for occupational pensioners. It has been made very clear from both sides of the House that there is opposition to abuse in this regard. It is well known that there has been and is abuse. It would be wrong not to acknowledge that.
Some of the letters and representations that I have had on this subject are from


people who say that they are not genuinely seeking employment but want the unemployment benefit because they have paid the money. This approach does not meet the rule concerning availability to work, and therefore these people are not entitled to benefits in that regard. I think that my hon. Friends would agree that where there is abuse, it cannot be countenanced.
We are dealing here with an issue concerning some 16,000 occupational pensioners. I am not using the argument that because it is a small number, it is an unimportant issue. When one person is affected, it is just as important as when the principle affects a million people. I accept that. But we are dealing with a relatively small number,
Among the public service people involved are the Post Office unions. They have raised great objection to this proposal and letters have been read in the House this afternoon from these unions. Most of the people concerned are excluded because their pensions do not reach the £25 limit. I have a letter here from Bryan Stanley, the General Secretary of the Post Office Engineering Union. We have had letters from Tom Jackson and from Civil Service unions.
My hon. Friend the Member for Ealing North (Mr. Molloy) asked what would be the Government's reaction to consultations not only with the unions concerned but with Members, and he asked whether it would be in order in such consultations and representations to raise the basic principle as well as the other issue. Again I say to my hon. Friends that of course we shall listen, and people are quite free to raise that basic principle and to discuss it with us.
I can give no commitment from the Government. I say to my hon. Friends that I am going as far as it is possible to go. I hope that they recognise that have listened to the debate and that we are replying in kind. We are not trying to push anything down anybody's throat. We shall listen and try to meet the point. It may not be possible at the end of the day to meet the central principal point, but it may be possible to go a considerable distance along the road. Of course we should consider the level of £25. That could be discussed and other aspects could be discussed. I know that many

of my hon. Friends are concerned for the principle, but at least I am saying that it is open for discussion with the Government.

Mr. Ovenden: My right hon. Friend has already conceded that the principle of student benefits is still open for discussion and that the principle of Clause 4 is still open for discussion. That being so, why does he not withdraw the Bill and come back after he has completed the discussion and decided on these principles?

Mr. Orme: In a sense I am trying to meet the will of the House. I have not conceded the principle of Clause 4. I have said that we shall discuss the principle. We are proceeding with the Bill because it is a Government Bill to which we are committed. In consequence, what I am trying to do—[Interruption.] I ask my hon. Friends to listen to the argument. I am genuinely trying to meet the main criticisms.

Mr. Palmer: My right hon. Friend referred to the Post Office Engineering Union which is greatly affected by this change. A number of unions have members who are similarly affected. Is my right hon. Friend prepared to meet all unions which have an interest in this matter?

Mr. Orme: Of course. We have already had a number of consultations with trade unions. We can form our judgment of the strength of the views which have been expressed tonight. I am trying to meet the arguments constructively. I assure my hon. Friends that my colleagues will be informed of the arguments and of their merit. That is surely what Parliament is about. I am not trying to make promises that cannot be met. I am going as far as is humanly possible to meet what hon. Members have said.

Mr. Molloy: I am grateful to my right hon. Friend for what he has said. I ask him to appreciate that a great deal of the argument that will be submitted to him could not be put to him in the House on Second Reading. I therefore welcome his willingness to meet those who understand the position thoroughly. I shall be able to tell those people that when they discuss this issue with my right hon.


Friend it will not be a formality but will possibly lead to doing away with the clause or at least to a re-examination of the position.

Mr. Orme: My hon. Friend is doing very well.

Mr. Speaker: May I remind the Minister that he has kept his back turned on the Chair for 20 minutes now. He is addressing not only his right hon. and hon. Friends but the whole House.

Mr. Orme: I am sorry if I have been discourteous to you, Mr. Speaker, but I thought that it was better to turn and face the Benches that are full rather than the empty green Benches opposite whicn are usually occupied by Tory Members. The Tory Party is supposed to be the party of compassion and is supposed to support the Welfare State. Where are the Tories?

Mr. Patrick Jenkin: We do not intend to vote against the Bill because we want to help the elderly with their mobility, we want to help the family over the cohabitation rule, and we want to help the old cases of industrial injury.

Mr. Orme: I leave my hon. Friends to judge what the right hon. Gentleman has said.
I have been asked what effect the Bill might have on the miners' retirement pension. We are studying that and I shall inform the House when we have more information.
I was asked by the hon. Lady the Member for Wallasey about the wives of invalidity pensioners. This is a detailed point. I shall write to the hon. Lady when I have more information, but of course it will be before the Committee stage.
The Government have gone some way tonight to meeting the objections that have been voiced. I see that the hon. Member for Isle of Ely (Mr. Freud) is smiling. We have taken part in a serious political dialogue which was important and to which the Government were bound to listen. They listened to it. I hope that my hon. Friends recognise that the Government have their difficulties, but they have listened and they will continue

to listen. We want to have consultations on the major issues. On that undertaking, I urge my hon. Friends to give the Bill a Second Reading and to allow it to proceed.
The mobility allowance is a small but important part of the Bill. It will provide £3 million for those who are severely disabled. It will bring about 100,000 people into mobility. It will give them a right that they have never had before. The right hon. Member for Wanstead and Woodford wanted to introduce means testing or discrimination, and that I cannot accept. The Government want to put in more money, and we shall not discriminate between one type of disabled person and another.
It has been said that many people who have the trike want their own mobility. It is said that they want to drive. The House knows that the trike has to be phased out because it is considered by independent assessment to be unsafe. I hope that within the next few years it will be possible to produce a vehicle that can be used by disabled people. I hope that the Government will be able to produce it or to provide for its production. We can make no commitment, but the Government are considering this issue in an active sense and are concerned about it.

Mr. Alexander Wilson: Will my right hon. Friend give us an assurance before the Division, if there is to be one, that no trikes will be withdrawn until there is an alternative vehicle?

Mr. Orme: It is not possible to do that. My right hon. and hon. Friends have met disabled drivers. My right hon. Friend is writing to every one of the 19,000 trike drivers. We are aware of the issues and we shall try to do something. We want to see another vehicle produced but we cannot give an open-ended commitment.
It has been said that this has been a unique debate in that the Government have not had any supporters. My hon. Friends have examined the Bill. It is a measure of which they are highly critical. They have raised various matters with the Government in an extremely constructive manner. I have tried to reply in the same vein. I hope that they will accept


my reply in the sense that the Government want to assist.
We are not out to remove benefits. We shall try to maintain the present situation. We are trying to maintain the Welfare State and to assist those who

Question accordingly negatived.

need assistance. We shall continue to do so.

Question put. That the amendment be made:—

The House divided: Ayes 26, Noes 172.

Division No. 9.
AYES
[9.59 p.m.


Bain, Mrs Margaret
Howells, Geraint (Cardigan)
Stewart, Donald (Western Isles)


Beith, A. J.
Kilfedder, James
Thompson, George


Benyon, W.
Page, Rt Hon R. Graham (Crosby)
Watt, Hamish


Bottomley, Peter
Page, Richard (Workington)
Welsh, Andrew


Brotherton, Michael
Pardoe, John
Wilson, Gordon (Dundee E)


Budgen, Nick
Reid, George
Winterton, Nicholas


Gow, Ian (Eastbourne)
Skinner, Dennis



Grimond, Rt Hon J.
Smith, Cyril (Rochdale)
TELLERS FOR THE AYES:


Henderson, Douglas
Steel, David (Roxburgh)
Mr. Clement Freud and


Hooson, Emlyn
Steen, Anthony (Wavertree)
Mr. Stephen Ross.




NOES


Anderson, Donald
Foot, Rt Hon Michael
Orme, Rt Hon Stanley


Archer, Peter
Forrester, John
Palmer, Arthur


Armstrong, Ernest
Fraser, John (Lambeth, N'w'd)
Park, George


Ashton, Joe
Freeson, Reginald
Parker, John


Barnett, Guy (Greenwich)
Garrett, W. E. (Wallsend)
Perry, Ernest


Barnett, Rt Hon Joel (Heywood)
George, Bruce
Prentice, Rt Hon Reg


Benn, Rt Hon Anthony Wedgwood
Gilbert, Dr John
Price, William (Rugby)


Bishop, E. S.
Ginsburg, David
Radice, Giles


Blenkinsop, Arthur
Graham, Ted
Rees, Rt Hon Merlyn (Leeds S)


Booth, Rt Hon Albert
Grant, George (Morpeth)
Robinson, Geoffrey


Bottomley, Rt Hon Arthur
Grant, John (Islington C)
Roderick, Caerwyn


Boyden, James (Bish Auck)
Grocott, Bruce
Rodgers, Rt Hon William (Stockton)


Bray, Dr Jeremy
Hamilton, James (Bothwell)
Rose, Paul B.


Brown, Hugh D. (Provan)
Harrison, Walter (Wakefield)
Ross, Rt Hon W. (Kilmarnock)


Brown, Robert C. (Newcastle W)
Hart, Rt Hon Judith
Rowlands, Ted


Buchan, Norman
Hattersley, Rt Hon Roy
Ryman, John


Buchanan, Richard
Healey, Rt Hon Denis
Shaw, Arnold (Ilford South)


Butler, Mrs Joyce (Wood Green)
Horam, John
Sheldon, Robert (Ashton-u-Lyne)


Callaghan, Rt Hon J. (Cardilf SE)
Huckfield, Les
Shore, Rt Hon Peter


Campbell, Ian
Hughes, Rt Hon C. (Anglesey)
Short, Mrs Renée (Wolv NE)


Cant, R. B.
Irving, Rt Hon S. (Dartford)
Silkin, Rt Hon John (Deptford)


Carmichael, Neil
Jackson, Colin (Brighouse)
Silkin, Rt Hon S. C. (Dulwich)


Carter, Ray
Jackson, Miss Margaret (Lincoln)
Silverman, Julius


Cartwright, John
Jay, Rt Hon Douglas
Small, William


Clemitson, Ivor
Jenkins, Hugh (Putney)
Smith, John (N Lanarkshire)


Cocks, Rt Hon Michael
John, Brynmor
Snape, Peter


Coleman, Donald
Johnson, James (Hull West)
Spearing, Nigel


Colquhoun, Ms Maureen
Jones, Alec (Rhondda)
Spriggs, Leslie


Concannon, J. D.
Jones, Dan (Burnley)
Stallard, A. W.


Conlon, Bernard
Judd, Frank
Stewart, Rt Hon M. (Fulham)


Cook, Robin F. (Edin C)
Kaufman, Gerald
Stoddart, David


Cowans, Harry
Lamborn, Harry
Strang, Gavin


Cox, Thomas (Tooting)
Lomond, James
Summerskill, Hon Dr Shirley


Crawshaw, Richard
Lestor, Miss Joan (Eton &amp; Slough)
Thomas, Mike (Newcastle E)


Cronin, John
Lever, Rt Hon Harold
Tinn, James


Crosland, Rt Hon Anthony
Lipton, Marcus
Tuck, Raphael


Crowther, Stan (Rotherham)
Luard, Evan
Varley, Rt Hon Eric G.


Cunningham, G. (Islington S)
Lyon, Alexander (York)
Walnwright, Edwin (Dearne V)


Davidson, Arthur
Lyons, Edward (Bradford W)
Walden, Brian (B'ham L'clywid)


Davies, Denzil (Llanelli)
Mabon, Dr J. Dickson
Walker, Harold (Doncaster)


Davies, Ifor (Gower)
McElhone, Frank
Watkins, David


Davis, Clinton (Hackney C)
MacFarquhar, Roderick
Weitzman, David


Deakins, Eric
MacKenzie, Gregor
Wellbeloved, James


Dean, Joseph (Leeds West)
Maclennan, Robert
White, Frank R. (Bury)


Dell, Rt Hon Edmund
Magee, Bryan
White, James (Pollok)


Dempsey, James
Marks, Kenneth
Williams, Alan (Swansea W)


Dormand, J. D.
Marshall, Dr Edmund (Goole)
Williams, Alan Lee (Hornch'ch)


Douglas-Mann, Bruce
Meacher, Michael
Williams, Rt Hon Shirley (Hertford)


Duffy, A. E. P.
Millan, Rt Hon Bruce
Wilson, Rt Hon Sir Harold (Huyton)


Dunnett, Jack
Miller, Dr M. S. (E Klibride)
Wilson, William (Coventry SE)


Eadie, Alex
Miller, Mrs Millie (Ilford N)
Woodall, Alec


Ellis, Tom (Wrexham)
Molloy, William
Woof, Robert


English, Michael
Moonman, Eric
Wrigglesworth, Ian


Ennals, David
Morris, Rt Hon J. (Aberavon)
Young, David (Bolton E)


Evans, Ioan (Aberdare)
Mulley, Rt Hon Frederick



Evans, John (Newton)
Murray, Rt Hon Ronald King
TELLERS FOR THE NOES:


Fernyhough, Rt Hon E.
Oakes, Gordon
Mr. Alf Bates and


Fitch, Alan (Wigan)
Ogden, Eric
Mr. Joseph Harper.


Fletcher, L. R. (Ilkeston)
O' Halloran, Michael

Main Question put forthwith, pursuant to Standing Order No. 39 (Amendment on Second or Third reading):—

Question accordingly agreed to.

Bill read a second time.

The House divided: Ayes 158, Noes 43.

Division No. 10.]
AYES
[10.10 p.m.


Anderson, Donald
Foot, Rt Hon Michael
Ogden, Eric


Archer, Peter
Forrester, John
O'Halloran, Michael


Armstrong, Ernest
Fraser, John (Lambeth, N'w'd)
Orme, Rt Hon Stanley


Ashton, Joe
Freeson, Reginald
Palmer, Arthur


Barnett, Guy (Greenwich)
Garrett, W. E. (Wallsend)
Park, George


Barnett, Rt Hon Joel (Hoywood)
George, Bruce
Parker, John


Bates, Alf
Gilbert, Dr John
Perry, Ernest


Benn, Rt Hon Anthony Wedgwood
Ginsburg, David
Prentice, Rt Hon Reg


Bishop, E. S.
Graham, Ted
Price, William (Rugby)


Blenkinsop, Arthur
Grant, George (Morpeth)
Radice, Giles


Booth, Rt Hon Albert
Grant, John (Islington C)
Rees, Rt Hon Merlyn (Leeds S)


Bottomley, Rt Hon Arthur
Grocott, Bruce
Robinson, Geoffrey


Boyden, James (Bish Auck)
Hamilton, James (Bothwell)
Roderick, Caerwyn


Bray, Dr Jeremy
Harper, Joseph
Rodgers, Rt Hon William (Stockton)


Brown, Hugh D. (Proven)
Harrison, Walter (Wakefield)
Rose, Paul B.


Brown, Robert C. (Newcastle W)
Hart, Rt Hon Judith
Ross, Rt Hon W. (Kilmarnock)


Buchanan, Richard
Hattersley, Rt Hon Roy
Rowlands, Ted


Butler, Mrs Joyce (Wood Green)
Healey, Rt Hon Denis
Ryman, John


Callaghan, Rt Hon J. (Cardiff SE)
Horam, John
Sheldon, Robert (Ashton-u-Lyne)


Campbell, Ian
Huckfield, Les
Shore, Rt Hon Peter


Cant, R. B.
Hughes, Rt Hon C. (Anglesey)
Short, Mrs Renée (Wolv NE)


Carmichael, Neil
Irving, Rt Hon S. (Dartford)
Silkin, Rt Hon John (Deptford)


Carter, Ray
Jackson, Colin (Brighouse)
Silkin, Fit Hon S. C. (Dulwich)


Cartwright, John
Jackson, Miss Margaret (Lincoln)
Small, William


Cocks, Rt Hon Michael
Jay, Rt Hon Douglas
Smith, John (N Lanarkshire)


Coleman, Donald
Jenkins, Hugh (Putney)
Spriggs, Leslie


Colquhoun, Ms Maureen
John, Brynmor
Stallard, A.W.


Concannon, J. D.
Johnson, James (Hull West)
Stewart, Rt Hon M. (Fulham)


Conlan, Bernard
Jones, Alec (Rhondda)
Stoddart, David


Cowans, Harry
Jones, Dan (Burnley)
Strang, Gavin


Crawshaw, Richard
Judd, Frank
Summerskill, Hon Dr Shirley


Cronin, John
Kaufman, Gerald
Thomas, Mike (Newcastle E)


Crosland, Rt Hon Anthony
Lamborn, Harry
Tinn, James


Crowther, Stan (Rotherham)
Lamond, James
Tuck, Raphael


Cunningham, G. (Islington S)
Lever, Rt Hon Harold
Varley, Rt Hon Eric G.


Davidson, Arthur
Lipton, Marcus
Wainwright, Edwin (Dearne V)


Davies, Denzil (Llanelli)
Luard, Evan
Walden, Brian (B'ham L'dyw'd)


Davies, Ifor (Gower)
Lyon, Alexander (York)
Walker, Harold (Doncaster)


Davis, Clinton (Hackney C)
Lyons, Edward (Bradford W)
Watkins, David


Deakins, Eric
Mabon, Dr J. Dickson
Weitzman, David


Dean, Joseph (Leeds West)
McElhone, Frank
Wellbeloved, James


Dell, Rt Hon Edmund
MacFarquhar, Roderick
White, Frank R. (Bury)


Dempsey, James
MacKenzie, Gregor
White, James (Pollok)


Dormand, J. D.
Maclennan, Robert
Williams, Alan (Swansea W)


Douglas-Mann, Bruce
Magee, Bryan
Williams, Alan Lee (Hornch'ch)


Duffy, A. E. P.
Marks, Kenneth
Williams, Rt Hon Shirley (Hertford)


Dunnett, Jack
Marshall, Dr Edmund (Goole)
Wilson, Rt Hon Sir Harold (Huyton)


Eadie, Alex
Meacher, Michael Milian,
Woodall, Alec


Ellis, Tom (Wrexham)
Millan, Rt Hon Bruce
Woof, Robert


English, Michael
Miller, Dr M. S. (E Kilbride)
Wrigglesworth, Ian


Ennals, David
Morris, Rt Hon J. (Aberavon)



Evans, John (Newton)
Mulley, Rt Hon Frederick
TELLERS FOR THE AYES:


Farnyhough, Rt Hon E.
Murray, Rt Hon Ronald King
Mr. Peter Snape and


Fitch, Alan (Wigan)
Oakes, Gordon
Mr. Thomas Cox,




NOES


Beith, A. J.
Hooley, Frank
Rooker, J. W.


Bottomley, Peter
Hooson, Emlyn
Ross, Stephen (Isle of Wight)


Budgen, Nick
Howells, Geraint (Cardigan)
Skinner, Dennis


Callaghan, Jim (Middleton &amp; P)
Kilfedder, James
Smith, Cyril (Rochdale)


Canavan, Dennis
Kilroy-Silk, Robert
Steel, David (Roxburgh)


Clark, Alan (Plymouth, Sutton)
Kinnock, Nell
Steen, Anthony (Wavertree)


Corbett, Robin
Latham, Arthur (Paddington)
Thomas, Ron (Bristol NW)


Edge, Geoff
McDonald, Dr Oonagh
Ward, Michael


Flannery, Martin
Madden, Max
Wilson, William (Coventry SE)


Fletcher, L. R. (Ilkeston)
Marshall, Jim (Leicester S)
Winterton, Nicholas


Fletcher, Ted (Darlington)
Maynard, Miss Joan
Wise, Mrs Audrey


Fowler, Gerald (The Wrekin)
Ovenden, John



Freud, Clement
Pardoe, John
TELLERS FOR THE NOES:


Garrett, John (Norwich S)
Price, C. (Lewisham W)
Mr. Ian Mikardo and


Grimond, Rt Hon J.
Richardson, Miss Jo
Mr. Tom Litterick.


Hatton, Frank
Roberts, Gwilym (Cannock)

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

Orders of the Day — BUSINESS OF THE HOUSE

Ordered,
That the Motion in the name of the Prime Minister for the Adjournment of the House may be proceeded with at this day's Sitting, though opposed, until half past Eleven o'clock or one and a half hours after it has been entered upon, whichever is the later.—[Mr. Ashton.]

Orders of the Day — SOCIAL SECURITY (MISCELLANEOUS PROVISIONS) [MONEY]

Queen's recommendation having been signified—

Motion made, and Question proposed,
That, for the purposes of any Act of the present Session to amend the law relating to social security, it is expedient to authorise—

(1) the payment out of money provided by Parliament of any administrative expenses incurred by the Secretary of State or a Government department under that Act and of any increase attributable to that Act in the sums which, under any other Act, are payable out of money so provided;
(2) the payment out of the Consolidated Fund of any secondary Class 1 contributions under the Social Security Act 1975 which are payable in respect of an earner in consequence of his employment in an office of which the emoluments are payable out of that Fund;
(3) the payment into the Consolidated Fund of any sums payable into it in pursuance of provisions of the said Act of the present Session relating to the payment of administrative expenses into that Fund out of the National Insurance Fund.—[Mr. Orme.]

10.22 p.m.

Mr. Nick Budgen: It is necessary to consider the Money Resolution with care because within it there is a provision that there should be a payment out of money provided by Parliament for administrative expenses—[Interruption.]

Mr. Speaker: Order. An hon. Member is trying to address the House.

Mr. Budgen: When the Minister for Social Security was purporting to address you, Mr. Speaker, while in fact addressing me and my new allies below the Gangway on the Government side, he said towards the end of his somewhat

disjointed peroration that he conceded that there were substantial anomalies and abuses within the social security system. It is right that we should do our best to see what are the injustices perpetrated by a system which now consumes about 20 per cent. of public expenditure, for there is no greater factor causing resentment and a sense of injustice than the present social security system.
First, there is the injustice which plainly arises when people entitled to benefit do not get it. Neither the Secretary of State nor the Minister of Social Security said much about that. They failed to take the chance open to them in introducing the Bill to do something to ensure that people understood the benefits rather better.
Against that background, we ought to consider the Money Resolution with a view to ensuring that administrative action is taken to help people to claim benefits to which they are entitled. When I last investigated the matter there were 16 different means-tested benefits administered by the Government and at the same time there were 32 different means-tested benefits administered by local authorities.
In order to help the citizen or his wife round this vast maze of confused benefit and means-testing there were recently extant as many as 100 different leaflets. A person does not need just a degree in law or public administration to look through and understand this great caucus of administrative fiat. He needs a first-class degree. He needs the sort of mind that a top civil servant or a senior judge has. It is a total abuse to think that a woman with perhaps five children and a sixth on the way has to try to thumb her way through all this great mass of literature to discover whether she is entitled to benefit.
I suggest that in this Money Resolution we should be considering ways in which we can provide administrative funds to simplify the system of benefits. It is very sad that the Minister and the Secretary of State have not thought of ways by which, for example, application for benefit can be made on a single form. I recall making this suggestion some two years ago. I believe that a pilot scheme has been tried in Shropshire. I am sorry that the Minister has not told us about


that pilot scheme, which might have been dealt with in the Money Resolution—

Mr. Speaker: Order. The hon. Gentleman is right when he says that it might have been dealt with, but it is not in the Bill. He must confine himself to the Money Resolution which deals with the Bill.

Mr. Budgen: I feared, Mr. Speaker, that you might misunderstand what I was saying, and I come back immediately to the Money Resolution, which, as you will have noted, refers in paragraph (1) to the payment out of money provided by Parliament on any administrative expense. I am, therefore, referring to those administrative expenses which might be paid out under that paragraph, and I think that you will agree that my suggestion for a rationalised and consolidated system for application for benefit will fall for consideration under the proposal for administrative expenses, and I shall confine all my remarks to these proposals for administrative expenses.
The second way in which administrative expenses might be curtailed is by a major attack upon abuse. The Minister dealt with the attack upon abuse, but I suggest that he did it in an unfortunate way because he did not suggest methods by which fraud could be attacked. I am sure that you will agree, Mr. Speaker, that that falls for consideration under the broad topic of expenses for administration.
I argue that the House is now entitled to consider the general question of measures taken to deal with fraud in the social security system.

Mr. Speaker: The hon. Gentleman is entitled to talk about administrative expenses, but not about the broad issue of fraud. We are not providing money for that.

Mr. Budgen: We are not knowingly providing money for fraudulent purposes, of course, but we are providing money for administrative expenses which are

going towards the broad proposals of the Bill and the Money Resolution which flows from it. I am suggesting proposals by which further expenditure might in the short term be properly incurred under this Money Resolution.

The Minister for Social Security (Mr. Stanley Orme): This is all totally out of order.

Mr. Nicholas Winterton: No. It is very good.

Mr. Speaker: Order. Private conversations should not continue across the Floor or, for that matter, horizontally.

Mr. Budgen: I am coming to the end of my remarks, and perhaps I am treading perilously near to the edge of what I am entitled to say on a Money Resolution.
To conclude, one of the ways in which the Government might consider a little extra administrative expense would be to look into the whole question of the requirement upon applicants to prove their identity when they apply for any form of social security benefit. They should look into the possibility of introducing identity cards, because most social security frauds arise from people pretending that they are someone else.

Question put and agreed to.

Resolved,
That, for the purposes of any Act of the present Session to amend the law relating to social security, it is expedient to authorise—

(1) the payment out of money provided by Parliament of any administrative expenses incurred by the Secretary of State or a government department under that Act and of any increase attributable to that Act in the sums which, under any other Act, are payable out of money so provided;
(2) the payment out of the Consolidated Fund of any secondary Class I contributions under the Social Security Act 1975 which are payable in respect of an earner in consequence of his employment in an office of which the emoluments are payable out of that Fund;
(3) the payment into the Consolidated Fund of any sums payable into it in pursuance of provisions of the said Act of the present Session relating to the payment of administrative expenses into that Fund out of the National Insurance Fund.

Orders of the Day — AGRICULTURE (MARKETING STRUCTURES)

[Relevant Commission Documents: R12157/77, R/471/76, R/2208/5P and R/238/76]

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ashton.]

10.31 p.m.

The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. E. S. Bishop): I welcome the opportunity to debate these three EEC proposals on marketing and processing, hops and potatoes. It will be useful to take these measures together since they all concern the structure of agricultural markets. Both the hops and the potatoes proposals have implications for the present United Kingdom arrangements, where our arrangements are rather different from those proposed in that we have a different form of producer involvement in the statutory marketing boards for hops and potatoes. The marketing and processing proposal is the first attempt by the Community to achieve long-term improvements in marketing structures in a planned and concentrated manner.
I will deal briefly with each of the proposals in turn, beginning with marketing and processing. When the Commission draft was first discussed in 1975, we doubted whether the measure as drafted could achieve the objectives set out for it and whether it could, therefore, represent a worthwhile use of limited Community funds. But we recognised that in certain sectors investment designed to improve marketing could benefit both producers and consumers, and the United Kingdom has, therefore, participated fully in the extensive discussion of the proposal over the last year. This has led to a number of improvements in the draft, as described in the revised explanatory memorandum submitted to the House on 26th November. In particular, a more coherent plan for drawing up programmes has emerged from discussions, and this would enable Agriculture Departments to direct investment to those areas which require priority for assistance. These areas could cover, for example, improvements to slaughter-houses, such as the programme recently

announced for assistance to bring them up to standard.
So far as other sectors are concerned, the Government will be considering what arrangements will be necessary in order to ensure that United Kingdom applicants can benefit from this new Community scheme, subject, of course, to the need to ensure that assistance is sufficiently concentrated to bring lasting benefit to the agricultural and fishing industries.
I shall leave this aspect at this point and resume the theme later when I discuss our attitude to potatoes not only our attitude to the Potato Marketing Board but to marketing boards generally.
Turning now to hops, which as everyone knows are an essential ingredient of beer, but which have no other outlets, we are dealing with a draft proposal to modify an existing regulation 1969/71, which sought to stabilise the market and ensure a fair income for producers by measures such as annual income aid for growers, aid to replanting with improved varieties and rewiring hop gardens and assistance with the formation expenses of producer groups.
The Commission now considers that these measures have proved insufficient to prevent the surplus on Community and world markets which has occurred since 1973. It has, therefore, put forward draft instruments to amend the existing regime in a number of ways. In particular, Document R/471/76 would grant annual income aid by groups of varieties of hops with similar uses and qualities, would strengthen producer groups by requiring members to market their total production through the group, and would grant annual income aid only to producer groups. It would also make available aid for replanting with new varieties and rewiring hop gardens for a further two years, on condition that the area of hops benefiting from grant was reduced by at least 40 per cent. Document R/2208/76 proposes that a two-year ban should be imposed on any increase in the area under production. It also enables the Council to take measures to prevent market imbalances in advance of the harvest concerned, rather than retrospectively.
In so far as these proposals recognise the need for a more organised Community market, they are welcome, since


a firmer market throughout the Community could be of considerable benefit to United Kingdom producers, whose returns depend on conditions in other producing countries as well as on the domestic market.
However, we need to reconcile our system of marketing through the Hops Marketing Board with the definition of producer group which was agreed in the original regulation drawn up before we joined the Common Market.

Mr. John Wells: Can the Minister give an indication of the value of United Kingdom hops which are exported? He referred to the prosperity of the world market being important to the prosperity of this country. Can he give an indication of how dependent our industry is on overseas markets?

Mr. Bishop: I shall be coming to that later. There is a surplus at present, and we took steps in recent legislation to deal with other aspects of the matter.
Negotiations on marketing systems and related problems are proceeding in Brussels at official level. The solution we aim for must be one that ensures that the Commission's market stabilisation proposals have maximum benefit both here and in the rest of the Community. This is important.
I turn now to the Commission's proposal for a common organisation of the Community market in potatoes. Potatoes are late-comers to the Community scene, and it may be that this is due to the problems they present in terms of marketing arrangements on a Community scale.
The production and marketing structures in Community States vary widely, and it will certainly be no easy task to find arrangements which will work satisfactorily on a Community basis and, at the same time, will not cut across the arrangements which are working reasonably well in individual member States, including this country.
The Commission's proposals have been on the stocks since January, and, frankly, little progress has been made so far. At present, the views of the member States do not seem to be sufficiently close to expect any early solutions, and it is difficult to see in which direction the

path is likely to lie. This is not to say, however, that the problem is insoluble on a Community basis—merely that there is a long way to go yet. It is therefore useful to have this debate now so that hon. Members have an opportunity to express their views well before substantive decisions are taken.

Mr. Nicholas Winterton: Does the Minister confirm that it is his view that the Potato Marketing Board in this country has a valuable part to play in the planting of certain acreages and the distribution of potatoes and that it will continue to do so?

Mr. Bishop: The hon. Member has anticipated some of the things I intend to say about the Board. We have paid tribute to the Potato Marketing Board and the other marketing boards for the general functions that they have carried out. It is the functions that we want to see for orderly marketing in future.
The Commission's proposal envisages a free market in potatoes conforming to enforceable grading standards, regulation of supply by adjustment of the grading standards and encouragement to producer groups to hold potatoes off the market in times of assessed surplus. There would be provision for aid for the eventual disposal of surplus production by producer groups at low prices for dehydration into animal feed. On new potatoes, imports would be subject to reference price arrangements and a high tariff of 21 per cent. ad valorem from 1st April instead of 16th May as at present.
Since the original proposal was put forward, some changes have been suggested by the Commission, but these do not alter the basic structure of the proposals. I should, however, mention in particular that the Commission has accepted that producer groups could receive aid for potatoes taken off the market and denatured raw for stockfeed as well as for those dehydrated for stockfeed at the end of the season.
The Commission's present proposals are not satisfactory to us as they stand. In particular, we do not regard producer groups, as defined in the proposals, as a satisfactory means of undertaking market support. The removal of potatoes from the market in times of surplus has to be


carried out on a scale which ensures that the operation will be effective. Producer groups at present cover only 10 per cent. of Community maincrop production and we can see little possibility of their expanding at a sufficient rate to provide a viable support mechanism—even if we could accept the principle that such groups should be selected as the sole recipients of aid for market support.
Other methods need to be looked at. For instance, one aspect which needs further examination is the possibility that producers collectively should contribute towards the cost, whatever system eventually operates. Our present view is that potato producers need some protection in seasons of heavy surplus—it seems a long time since that was so, due to the weather—when low prices could discourage producers from future plantings and so create instability from year to year, to the consumer's disadvantage. In other words, confidence is essential for adequate production.
The proposals for reference prices for imports of new potatoes from third countries coupled with an early increase in the common customs tariff could, as the Scrutiny Committee has recognised, inhibit our traditional practice of importing new potatoes from these countries in the early spring to bridge the gap between our old and new home crops, and this is another feature of the proposals in which we see particular difficulty.
The Committee stated that the existing guarantee and marketing system which we have operated has served both producers and consumers well for many years. This is my answer to the hon. Member for Macclesfield (Mr. Winter-ton). Indeed it has, but I do not think that it is realistic to envisage our own system, which is tailored to the particular needs of our market and to the circumstances of our own production, as being necessarily suitable as it stands for direct application throughout the Community as a whole, bearing in mind that the conditions in other member States vary widely from our own. We have pointed to the advantages which our present system has brought us, but we have to try to find a common solution, and I think that it is right to start with an open-minded approach, while not forgetting the benefits which our own system has achieved.
I think that, whatever the speed of progress and the eventual outcome of the EEC negotiations, potato producers in the United Kingdom face a more competitive future, particularly as the transitional period will end next year and we shall not be able indefinitely to insulate our market from Europe. I do not think that our producers should be discouraged by this, and I hope that they can regard it as a challenge and look towards the future with the confidence which I am sure is justified.
I want to say on this aspect of the Potato Marketing Board and boards generally what my right hon. Friend, the Government and I have stressed several times, namely, that our marketing boards have on the whole performed a worthwhile job in providing a marketing structure that gives not only confidence to the producer but security of supplies and generally reasonable prices to the consumer. Whilst we may not be able to preserve the structure of our marketing boards, we shall seek to ensure that their functions essential to the orderly marketing of the crop are fulfilled in the future. That is an important point to bear in mind with any changes that come about in these directions.
I have spoken only briefly on these topics as I am anxious to allow full scope for hon. Members to express their views.

10.45 p.m.

Mr. Michael Jopling: I thank the Minister for coming to the House to explain the contents of these four regulations, but I became extremely concerned when, at the end of his speech, I heard him talking about the future of the marketing boards. [HON. MEMBERS: "Hear, hear."] I am glad that I have support from both sides of the House.
I hope that the Minister will not take it amiss and think that I am trying to be difficult to him personally, or awkward in any way, but the House is in some difficulty because of the lack of continuity in dealing with these matters. The Scrutiny Committee considers these matters. We know that in one case the previous Minister, Lord Peart, gave evidence, and that on the two documents dealing with hops the Parliamentary Secretary gave evidence. It does not seem as though the Minister of State spends


much time dealing with these matters. I say this in no sense of criticism, but it is unhelpful for continuity in dealing with these topics if one Minister gives evidence to the Scrutiny Committee and deals with the regulations in Brussels and the Minister of State comes to the House to explain the contents of the regulations. I hope that the Government will give some thought to the possibility of having some personal continuity, so that only one Minister deals with the Scrutiny Committee, explains the regulations to the House and negotiates these things in Brussels.

Mr. Bishop: I appreciate the point, but the fact is that all Ministers work together. We are all in the same Government. If I may follow the hon. Gentleman's argument about the need for continuity, that is a reason why he should not expect to come to this side of the House.

Mr. Jopling: I notice that the hon. Gentleman gave evidence to the Scrutiny Committee only on fishing affairs. All I am saying is that the Minister who handles these matters on the Floor of the House would be in a better position if he were to handle the subsequent negotiations in Brussels after having heard what goes on here. I hope that the Minister will not think that I am being personal, because I am not.
The difficulty that I find in dealing with these four complicated and highly important regulations is that in a short debate lasting only one-and-a-half hours it is impossible to go in to detail, and, therefore, I must stick to the fundamentals and background to these documents.
I begin by declaring once more my interest as a farmer and one who has grown a fair number of potatoes each year for the past 20 years. These regulations deal with marketing, and we have always acknowledged the importance of improving the way in which farm produce is sold. Since the war, as an Opposition we have given our support to improved marketing arrangements.
I am glad to have this opportunity of putting on the record my party's attitude about methods of improving agricultural marketing. As a party we supported enthusiastically the measures for farm co-operatives entered into in the

1967 Agriculture Act. I can remember that in my party's 1973 manifesto we gave an undertaking that we would give added support to the Central Council for Agricultural and Horticultural Co-operation. As a party we have always supported improved agricultural marketing. I can remember that my hon. Friend the Member for Devon, West (Mr. Mills) and I made our maiden speeches in the House, almost 12 years ago to the day, on the setting up of the Home-Grown Cereals Authority, which has done so much to improve the way in which grain is marketed.
We have always given our consistent support to the statutory marketing boards which do so much to help marketing in this country. As an Opposition we put particular emphasis on the importance of the marketing boards. We believe that the statutory marketing boards do a fine job. We strongly believe that they must be protected. This is why these regulations alarm us and why the last sentence or two of the Minister's speech alarmed us. The Select Committee has done a fine job in proposing to the House that these regulations should be discussed again. It has interviewed a number of Ministry witnesses to clarify the regulations, and that is a great help to us.
I turn now to the regulations and deal first with Document R2157/75 dealing with the marketing and processing of agricultural produce. I am afraid that the House has had some difficulty in getting hold of the latest explanatory Memorandum dated 26th November, to which the Minister referred. I notice that when the Select Committee considered these matters it said that it recommended that some way should be found of informing the House in good time of changes in the explanatory memorandum so that the document was meaningfully debated. I regret to say that I was not able to get a copy of the latest memorandum until some time after five o'clock this evening. I do not consider that that allowed sufficient time for study before a meaningful debate.
I welcome the gist of what is in the document. It endorses the sort of work we have always supported through the Central Council for Agricultural and Horticultural Co-operation. I am glad to see that the document does more than


help co-operatives. I know that there have been some in the agricultural trade who have been concerned that assistance was available only to co-operatives. As I read the document, particularly paragraph 3 of the explanatory memorandum of 26th November, assistance will be available for private investment as well as public and semi-public organisations.
The crux of this scheme is whether the Government will be prepared to back up any money which is available from the Community. If the Community says "We will give you 25 per cent. grants on expenditure which is approved under the scheme" and the Government say "We will not give you anything" the people in Brussels might just as well have kept quiet. When money is available from Brussels it is important that the Government endorse such a move. The Minister has said that the Government will provide money for slaughter-houses. I hope he will tell us, when he replies, whether they will be prepared to match Community money in other respects.
I come now to what I regard as the most important part of these regulations; namely the effect they will have on the existing schemes under our statutory marketing boards for the marketing of hops and potatoes. We regard the three documents which deal with these matters as constituting threats both to the Hops Marketing Board and to the Potato Marketing Board. We have very serious reservations indeed about this set of documents. We think it is right to make it perfectly clear to the Government that we have these serious doubts.
Dealing with Document R/238/76, which is concerned with potatoes, I was interested to see that the memorandum produced on these matters by the National Farmers' Union states on page 3 that
The draft regulation is entirely unacceptable in its present form… We are convinccct that unless substantial improvements can be obtained both consumers and producers will suffer considerably.
That is in paragraph 12. In paragraph 13 it is stated that
The main functions of the Potato Marketing Board would be vitiated. These results would be directly contrary to the assurance given in Article 43(3) of the Treaty of Rome. They would also go beyond the assurances regarding the continuation of Marketing Boards given by the British Government in

the course of negotiations prior to entry into the Community.
That is why many of us are very concerned about these suggestions. We have also seen that the Potato Marketing Board is as hostile to this document as is the National Farmers' Union.
I was astonished to find, in the explanatory memorandum produced by the Government, a rather complacent attitude. There it states:
Thus the structure of the industry generally and the position of the Potato Marketing Board would probably be affected if this part of the proposal were adopted.
I think that is pitching it very low indeed.

Mr. Peter Mills: If my hon. Friend studies that document carefully and looks at the signature at the end, he will find that it is the very Minister who is here tonight who has not really come clean on these matters and said what is the attitude of the Government to the future of any of these boards. The Minister himself actually signed it.

Mr. Jopling: I observed it and was about to come to that in the latter part of my remarks, if my hon. Friend will wait a moment. The document which the Minister of State has signed is a stupendous piece of understatement, because this is a very dangerous statement indeed.
I understand that the document is also opposed by COPA, the European farmers' union. The Minister said that there was no early solution to these matters and that he was unhappy about it. I suggest to the Government that this document should be thrown out. I have heard rumours emanating from Brussels that the Commission is having serious second thoughts about the document. So it should, I may say.
I am astonished at the way this document was produced. If we look at the evidence which the previous Minister of Agriculture, now Lord Peart, gave to the Select Committee on 16th June 1976, we can see from page 99 that there was no discussion about this document between the Government of this country and the interests in this country before these proposals were produced. I hope that we shall hear no more of these regulations tonight.
The two documents which refer to hops also concern us very much indeed. They provide for a scheme for the marketing of hops. Although I accept that they will not in themselves result in the decline of the Hops Marketing Board, they will provide a scheme which will deprive United Kingdom producers of hops of income aid under the scheme. This is purely because the Hops Marketing Board does not operate according to the Commission's arbitrary definition of a producer group. Does not the Minister agree that the Hops Marketing Board performs this duty just as effectively as any producer group that might be set up to market hops? Why can he not negotiate an arrangement to allow the Hops Marketing Board to operate as a producer group?
Finally, would not the Minister agree that if the Community wants to strengthen the position of hop producers, as it professes, these schemes will not do that? These schemes, if applied to the United Kingdom, will weaken the position of hop producers by perhaps dividing them and otherwise weakening their powers to market their produce.
I therefore greatly hope that the House will give to the Minister tonight the message that this scheme is not in the best interests of hop producers in Britain, and I hope that he will state that he accepts that.
We believe that these documents constitute a threat to the system of organised marketing of farm produce which has been carefully built up in Britain over the years. It is a system which is in the best interests of producers and consumers. It stabilises production to ensure that adequate supplies of food are in general available to the public at reasonable prices.
Lest any hon. Member is tempted to point to what has happened to the potato crop and potato prices over the past two years, I submit that that is not basically the fault of the Potato Marketing Board. The very high potato prices we have had in the past two years have been due largely to two factors—first, the weather, and secondly, the Government's failure to give an adequate guaranteed price to farmers so that adequate acreage of potatoes was planted.
Once we start to give way over the matter of statutory marketing boards within the Community, I believe that it will put the rest of the system of statutory marketing boards in jeopardy and, in particular, we shall put that magnificent organisation the Milk Marketing Board in danger. The Milk Marketing Board does more good to producers and consumers in Britain than any other statutory board. [HON. MEMBERS: "Hear, hear."] I am delighted to be carrying the House with me.
This does not mean that we believe that the present situation is sacrosanct. We have accepted for a number of years that on accession to the EEC some adjustments might be necessary, but this is where I come into conflict with what the Minister of State said. At the end of his speech he implied that there might have to be considerable changes in the structure of our marketing boards. I believe that that would be unacceptable to the House. I was very suspicious when I heard those words of his.
In general, we believe in what the Minister of State has said in the past. I was interested in the reply he made on 8th July:
Our aim is to maintain the functions of the marketing boards, including the MMB, which are essential to the orderly marketing of the products concerned."—[Official Report, 8th July 1976; Vol 914, c. 1583.]
That was a fine statement, and I hope that we shall have from the Minister tonight an unequivocal restatement of the views he then held. We want an acceptance of the proposition that if one removes one fundamental brick—say, the Hops Marketing Board—the whole structure could some crashing down. We want a statement of intent from the Government that they will set out at once to negotiate with the Community the matter of the future of the marketing boards. I believe that the Community will be helpful.
We have heard of delegations from the European Parliament which have come to this country at the instigation of my hon. Friend the Member for Norfolk, North-West (Mr. Brocklebank-Fowler) and seen the Milk Marketing Board. They have gone away impressed with the way our marketing boards operate. Great credit is due to my hon. Friend, who


has to be in Europe tonight and, therefore, cannot attend this debate. Many Members of the European Parliament have returned and asked why they cannot have marketing boards in the same style as ours. That is why I say that I believe that the Community will be helpful.
We do not seek to express displeasure by voting against the motion to adjourn. That would not be a sensible attitude to adopt. However, there may come a time when it is necessary for us to make our teeth meet. It will not be necessary for us to insist, by opposing the motion, that the powers of the marketing boards be not torn to pieces, but I warn the Government that unless they are prepared to preserve our essential marketing boards —they have had a warning in the way that the House reacted to the Poultry Hygiene Regulations—they may find themselves in trouble in future.
I give the Government the firm warning that in their negotiations in Brussels we shall be watching carefully to ensure that the essential and valuable structure of the marketing of farm produce in this country is not turned aside in the most disastrous way.

11.6 p.m.

Miss Joan Maynard: We have one of the most efficient agriculture industries in the world, but it is not much good being good at producing food if one is not much good at marketing it. The workers in the industry support the statutory marketing boards. We believe that they have been good for producers and consumers. That is true of the Milk Marketing Board.
Tonight we are discussing hops and potatoes. The threat lies in that area tonight, but it may well be that the threat will be extended to the Milk Marketing Board. I believe that the boards have brought stability to our industry. It is important to maintain the boards and the marketing system, but, if possible, we must extend the arrangements so that producers may get a proper return for their produce.
Good marketing is essential. Our agriculture marketing needs to be better organised to withstand the many pressures that the industry has to face. Let us consider, for instance, the vast sums that have been made out of the agriculture industry by the fertiliser firms, the

machine manufacturers and the cereal manufacturers. Those people are extremely well organised. Farming people have also to be well organised to withstand that sort of pressure.
I understand that, as the hon. Member for Westmorland (Mr. Jopling) said, when the EEC representatives came to this country they were impressed by the Milk Marketing Board. We are not saying that our marketing system is perfect or that it should be transplanted to other EEC countries, but we find it extremely satisfactory and we hope that the Government will fight to retain it. We do not want them to be complacent. I see the regulations as a threat to our industry, and I ask the Government to give a firm assurance that they will fight to keep our statutory marketing boards.

11.9 p.m.

Mr. Michael Hamilton: First, I pay tribute to the Scrutiny Committee. As a member of the Foster Committee, I think that it is doing its job well. It is thanks to the Committee that we have this debate tonight. It is not its fault that the time ration is so meagre.
At the outset I must declare an interest. I am a member of the Hops Marketing Board. I was a member before coming into the House. I have an affection for the hop trade and industry. What is more, in these days when English Members are getting rather bored with talk about devolution, it is refreshing to talk about English hops. There are no drying kilns in Wales and there are no oast houses in Scotland. Hops are an essentially English product.
The Hops Marketing Board consists predominantly of hop growers. Each represents a district, each represents the views of his neighbouring growers within his district, and each is subject to election and re-election. It is a hard-working, practical and experienced body. I find that farmers sitting round a board table are just as refreshingly direct and outspoken as they are when hon. Members go to farmers' meetings in their constituencies on Friday evenings.
The Hops Marketing Board is a more sophisticated and efficient method of marketing hops than anything anywhere within the European Community. I have no doubt that the overwhelming majority


of English growers wish the Board to retain its powers.
Looking back to the period between the wars, to the days before the Board came into existence, we see an industry crippled by over-production, with bankruptcies and depression. It is interesting that, in their troubles, growers formed themselves into an association. In 1925 they created what was known as English Hop Growers Ltd. Growers representing about 90 per cent. of the acreage of hops were persuaded to join. Members agreed to restrain their picking of hops so as not to pile up the surpluses any further. The hop is a very expensive crop to grow. English Hop Growers Ltd. also persuaded its members to hold out for a sensible price. That was a notable example of self-help.
Yet, by 1928, after only three years, that association collapsed. The House may ask: why was that? The answer is that it was wrecked by the 10 per cent. of growers who stayed outside, sold all the hops that they could grow, and were always prepared to undercut the 90 per cent. The biggest danger to a producer group is the man outside. When that happened, despair returned to the hops industry.
In 1931 this House passed the Agricultural Marketing Act and growers saw in it again their hope of salvation. In March 1932 hop growers were the first body of farmers to ask the Minister to bring in a marketing scheme. The Hops Marketing Board—the first marketing board to be set up—has served the industry now for nearly half a century. It has abolished surpluses, brought stability, and succeeded in a job where others in Europe have failed.
The hops market in Europe is in a parlous state. Over-production is rife, as the Minister knows. There is a multitude of small growers, particularly in Germany, who are incapable of organising their own market. This system may be picturesque, but it is 50 years behind ours.
These regulations have excellent intentions and the highest motives. They deserve praise. They are admirable for the continent of Europe and a major step in the right direction. I concede second place to no one in always having

believed in the concept of the European Community and, indeed, our membership of it, and I am on record in Hansard as far back as 1961 in saying so. But the irony of the whole situation is that these EEC regulations, so excellent in intention, are nevertheless grievously damaging to the industry here in the United Kingdom. The voluntary principle is attractive. The idea of people being able to opt in and out of a producer group has great merit. But, I repeat, the biggest danger to a producer group is the man outside.
As the House realises, if the hop growers want their marketing board to he wound up, they have only to approach the Minister and he will do it for them tomorrow. There is no difficulty about it. But they have not yet asked for that, and, of course, they remember what happened in the 1920s.
Moreover, it should be said that the English hop grower does not want to be subsidised. He does not want the taxpayer or EEC funds to guarantee him a certain level of income. That is not what he is looking for. He has not asked for it in the past. What he would like is a Hops Marketing Board for Europe. But if that cannot be, if eight countries will not follow one, and if Europe cannot attain our standards of marketing, what then? At the least, there is no argument there for weakening our own organisation, and no argument for penalising our own growers. Nor is it an argument for denying our own growers aid which may be available. In the long term, to subsidise some and not others means that others are driven out of the market.
There is only one possible solution, and that is the solution proposed by my hon. Friend the Member for Westmorland (Mr. Jopling) in his excellent speech—that the Hops Marketing Board must be regarded as a producer group as it stands.
There is more at stake than the Hops Marketing Board. We are concerned tonight with wider issues. We are concerned with statutory marketing powers. Scrub out the Hops Marketing Board and the sun will still come up in the morning. Only a small industry in this country will have been injured. But scrub out the Hops Marketing Board and a precedent


is created, for it is the concept of marketing boards which is challenged, and if this outpost is sacrificed other will fall.
My constituents in Salisbury do not grow hops, but they realise full well that if the Government allow this, the senior of the marketing boards, to fall, others will follow. As night follows day, the Milk Marketing Board and the Potato Marketing Board will follow, as my hon. Friend the Member for Westmorland said. It is the "domino theory" with a vengeance. Therefore, it is here, or it is nowhere, that the Government must make a stand.

11.19 p.m.

Mr. Wm Ross: I cannot pretend to take up what the hon. Member for Salisbury (Mr. Hamilton) has said about hops. We do not grow hops in Northern Ireland. Indeed, I have never seen a hop in my life. But I am the owner of a farm. I have grown most other crops normally grown on farms, and I do not imagine that hops are all that different in their economics from anything else.
We should realise that these EEC documents represent a further attempt to maintain the myth that the common agricultural policy works. But I think it significant that in the explanatory memorandum to Document R/471/76 the second paragraph draws attention to the fact that previous efforts failed, and indeed contributed to the failure These efforts proved insufficient in a time of surplus. No one should be surprised at that, for the CAP has given us mountains of butter and beef and even a lake of wine, and now, from the final product of hops, we shall have a lake of beer on which to float a mountain of chips—although it looks as if there will be no fish. That situation arises because Common Market countries are potentially and actually growing more of most staple food stuffs than are needed on the European Continent. We are bound eventually to be an exporting market rather than an importing market in all such commodities.
There is talk of a structural surplus. What is meant by that? It appears that structural surplus means that too many hops are grown. It means that the EEC Commissioners decided that there must be not only a 40 per cent. reduction in acreage but a total reduction in hops grown.

We want to know whether that cut in acreage and production will fall specifically on England or whether it will affect less efficient producers in Europe.
The memorandum relating to document R/2157/75 deals with the marketing and processing of agricultural products. I wonder whether the Government have taken note of how efficient marketing boards are. I felt slightly chilled by the Minister's closing remarks. He seemed to be saying that the Government will not hold the fort for the marketing boards of this country.
I draw the attention of the House to paragraph 10 of the memorandum. That says that the aim is to improve the returns of agricultural producers in a cost-effective way. If that is so, it must be done in a successful manner because it will take about one-quarter of the Guidance Fund's expenditure. There is nothing in the EEC proposal that will create that return.
What is the aim? Paragraph 5 states that to be eligible for aid projects would have to aim:
to guide production in a direction sought by the Common Agricultural Policy".
We have not been told item for item and product by product in what direction we shall be guided.
Paragraph 5(b) states that there must be an aim:
to lighten the burdens of intervention mechanisms by effecting long-term structural improvements".
In other words, by forcing out the small producer.
Paragraph 5(c) states:
to aim to remove the need for intervention in the long-term".
In other words, we must create a deficit or in balance" situation.
Paragraph 5(f) states that another aim must be:
to help to improve the quality of products and the use of by-products".
The memorandum also says that an aim must be is encourage research into new methods and techniques and to assist in making market intelligence more easily available. Surely those are the things which the marketing boards in the United Kingdom do. Therefore, I cannot see that we have any need of these regulations. Indeed, it appears to me, in the light of what the Minister said, that the


whole thing is being aimed at removing the marketing boards in this country, to the detriment of the agricultural industry and ultimately of the consumer here.
Then we are told that the things that are to be set up to improve marketing efficiency, and so on, are to be situated in areas which are experiencing difficulties from the CAP. I once more draw attention to the fact that the Northern Ireland farmer is suffering from the difficulties of the CAP, but the principal reasons why we are suffering from those difficulties are a land boundary and the green pound. The Government have consistently failed to make any efforts to correct that situation in a manner that is meaningful and lay the proper foundations for the protection of the farming industry in Northern Ireland.
I know nothing about hops other than what I have said tonight. Some months ago we had a debate about male and female hops, and so on. However, I know quite a lot about growing potatoes. I have grown a lot of them. For many years my father and I grew propagation plots for the seed potato industry in Northern Ireland. I have probably seen more varieties of potatoes grown—many of which never came on to the market—than most people. I think that I can claim to know quite a bit about growing potatoes.
I disagree with the hon. Member for Westmorland (Mr. Jopling) when he said that there were two reasons for the shortage of potatoes. I believe that basically there has been only one reason. That has been the queer weather conditions that we have had for the last two years, which have inhibited the growth of the potato crop to a totally unforeseen extent. In Northern Ireland this year our crop was much more successful than that in the rest of the United Kingdom, because we had at least enough rain to keep the crop moving.
If we are to get anywhere with potatoes, the Minister should give more information on the subject. At present we compete in the sale of potatoes in other countries of the world. Northern Ireland's principal reason for growing potatoes is to export seed. We export quite a variety and number each year, especially to Middle East countries and England. We have competed very success-

fully. Looking at the explanatory memorandum dealing with potatoes, it appears that we are now being asked to have a mountain of very dear potatoes. It states
The proposals provide for the possibility of granting export refunds to the extent necessary to enable Community products to compete on the world market.
That may make sense to someone, but it does not make much sense to me. What exactly is it intended shall be done about the growing of potatoes in the United Kingdom as a whole and, specifically, the seed crop in Northern Ireland? In Northern Ireland we have a very efficient Potato Board for marketing our seed. We want to keep it, and we do not like the idea that it will be filched away from us or that its powers will be reduced in such a way that it will get into the position of the hop growers in 1928 and for exactly the same reasons.
Perhaps the Minister will also expand on his opening remarks when he said that one method of controlling the amount of potatoes for sale would be to change the grading requirements. I have personally grown potatoes, and more, I think, than most hon. Members. What precisely did he mean by that remark? I am sure that all who grow potatoes would like to know.
Taken as a whole, these documents highlight the basic problems of the CAP for the United Kingdom, especially in view of our situation vis-à-vis the rest of the Continent of Europe. The plain truth is that all the nations of the EEC other than ourselves are food-exporting countries, whereas we are a food-importing region. It is impossible for a system which suits exporting regions to suit the United Kingdom, which has to import.

11.30 p.m.

Mr. Peter Mills: I want first to congratulate my hon. Friend the Member for Salisbury (Mr. Hamilton) on his excellent speech. It was interesting to hear his views.
I welcome this opportunity to say a few words, because we who serve on the Select Committee felt that these were important measures which should be discussed by the House. That is why we hope that, when we have finished, we shall have a much clearer idea about the Government's views.
Frankly, I thought that the Minister of State spoke in a very hesitant manner. His speech lacked any clear vision and determination on these very important matters. I can assure him that if he goes to Brussels with a hesitant note in his voice he will not get very far. I hope that he will take with him the very clear messages being given to him by hon. Members and will go to Brussels with much firmer views, determined to fight for what we believe to be essential.
It was gratifying to hear Labour Members supporting us, especially the hon. Member for Sheffield, Brightside (Miss Maynard). Their support means that, at the end of this debate, the Minister will know that the House is determined to take a firm line. I hope that there will be no more hesitancy on his part. We want a firm declaration on these matters.

Mr. Bishop: The House has had it.

Mr. Peter Mills: With respect, we have not had it. My hon. Friend the Member for Westmorland (Mr. Jopling) put his finger on the very matter about which we want to hear from the Minister: will the Government back up all these words with money, and will they back up the Community and ensure that these schemes go forward, especially in relation to marketing?
To say the least, we are very worried about what the Minister said towards the end of his speech, about his attitude to the boards. If that is the attitude of the Government at the moment, all that I can say is "Please bring back from another place Lord Peart, who at least was firm on marketing boards."
There must be no weakening in our attitude towards producer marketing boards. They have been tried, and they have been proved to be right. We must continue with them. Any alteration, even in the case of the Hop Marketing Board, will be the thin end of the wedge and will put us on a slippery slope from which we shall not be able to escape once we have started down it.

Mr. Nigel Spearing: The only matter which may separate the two sides of the House is that the hon. Member for Devon, West (Mr. Mills) and his right hon. and hon. Friends did not insist when they could have done that stopping the erosion of the marketing

boards should be a condition of British entry. If they had done that, my hon. Friend would not be under pressure to do so now.

Mr. Mills: I do not agree. It was a Labour Government who conducted the renegotiations, and they did not make this a firm condition either. In any event, I do not think that the position is so serious as long as the Minister and the Government do not weaken. We are trying to strengthen the hon. Gentleman's resolve so that he goes forward determined to make this stand.
There are serious doubts about the Government's determination to help agriculture. One sees this in other respects. What are their intentions for the future of agriculture? The hon. Member for Londonderry (Mr. Ross) mentioned the green pound. I should be out of order to discuss that, but all these items add up. If the Government weaken their stand on marketing boards, there will be question marks over their intentions for agriculture and increased home production. This occasion will be another test of whether they take seriously the production of food at home.
If we lose on the issue of the Potato Marketing Board and the Hops Marketing Board, the position of the Milk Marketing Board will become extremely difficult and it will be hard to resist demands for its abolition. The common agricultural policy has enough problems without making more, but there will be more if a potato marketing regime is introduced. The CAP has many difficulties, mostly caused by monetary problems. I still believe in the CAP and its underlying concept, but this is not the best time to come forward with a potato regime as is suggested.
We should say "No" to such a scheme for the moment and we should say "No" to the hops scheme. We may be able to go forward later when the monetary and other problems of the CAP are resolved, but at the moment we should say "No" to both schemes.
I come finally to marketing. I believe that the House can give its blessing to this proposal, although there are some issues to be ironed out. There are nearly 400 million units of account to cover the first five years, and the whole scheme is intended to be completed in 10 years.


That is far too long. We cannot wait for these marketing adjustments and improvements to take as long as that. The Community should channel far more money into getting marketing right, and it should do so over a much shorter time.
The hon. Member for Londonderry queried some of the objectives. We do not want to put food into intervention. If we can get better marketing, there is no need for intervention. It is far better to find the right solutions to these problems. It may well be that, as a result of our aid and encouragement, we can get the French, German and Dutch farmers to have a milk marketing board so that marketing is properly organised on the Continent to ensure that we do not have a surplus as we have at present. I whole-heartedly welcome the marketing proposal.
It is right to mention the problems of the trade in connection with eligibility for Government or EEC assistance being decided on the merits of the project and not on the constitution of the organisation concerned.

Mr. Nicholas Winterton: My hon. Friend has referred to what was said by the hon. Member for Londonderry (Mr. Ross). Would he deal with what the hon. Gentleman said about the eight other countries of Europe being basically food-exporting countries while we are importers and yet so many of the documents that we have to consider have the exporting interest in mind? Does he not agree that our own future and that of the Common Market should be based not on destroying a successful marketing board but on exporting our successful boards to the EEC?

Mr. Mills: Absolutely. The other countries may have certain products to export to us, but we have to remember that there are products that we export to them. We export seed potatoes all over the Community. It should be a two-way affair.
There is the problem that certain organisations will not be eligible for this help. The National Poultry Federation is concerned about this, and I hope that the Minister can reassure the corn and seed merchants and the National Poultry Federation.
I do not like the proposals for hops and potatoes, but I do like the arrangements for marketing. I hope that the Minister tonight will give us not just words but a firm promise that the Government will back up the Community schemes for marketing with the finance required.

11.41 p.m.

Mr. Geraint Howells: I declare my interest as a farmer and also as Vice-Chairman of the Wool Marketing Board, on which I have had the privilege to represent Wales for the last 10 years.
This is one of the most important Adjournment debates for a long time. It is crucial for the agricultural industry that the marketing boards should retain their statutory powers. If one removes the statutory powers of the marketing boards one might as well disband them tomorrow. I favour many of the principles involved in the marketing boards, and tonight I am a worried farmer, politician and Vice-Chairman of the British Wool Marketing Board. I cannot see eye to eye with the Minister of State, who said that he was unsure whether the boards' future would be secure. I am therefore, very wary of these proposals, which seeem to be the first steps on the road to the abolition of the boards and their statutory powers.
The majority of farmers and producers are indebted to their marketing boards for the way that they have marketed commodities, whether milk, wool, potatoes or hops, over the last 10 years or more. We are all aware that it was because of the producers' wishes that the Milk Marketing Board was formed in 1932 and the Wool Marketing Board in 1950. These are producer boards with statutory powers. All these boards are in danger of becoming targets for our counterparts on Europe, who will do everything in their power to abolish the system of which we are so proud.
Production in all sectors of the agricultural industry is on the decline. Our import bill for food and feeding stuffs is increasing at a colossal rate every year. We must restore confidence in the industry, and hold on to our marketing system and our guaranteed price system. If we abolish this system we are doomed to failure. Like many others, I hold the


view that we must have a floor to the market or we may, as producers, face a very weak market indeed. Unless we are careful, it will be only a matter of time before the Milk Marketing Board is abolished, and others, such as the Wool Marketing Board, follow. Therefore, it is important that the Minister should give us an assurance tonight, before we accept any proposals or suggestions to change the system, that he will not throw away our marketing system which is operating so successfully, as it has done over the past 20 to 30 years.
The NFU brief makes clear that the unions strongly believe that both producers and consumers in this country have been well served for many years by the potato marketing scheme administered by the Potato Marketing Board. The NFU—whose view is the most important on this subject—draws attention to the safeguards outlined in the Treaty of Rome concerning the introduction of common regimes for commodities and Government assurances on the future of United Kingdom marketing boards.
There are rumours of talks taking place in Brussels about the future of the Hops Marketing Board. The talks have been kept secret, and many hon. Members would like to know how they are progressing. It is safe to say that the Board is under threat.
I beg the Minister of State to stand firm in support of our marketing structure and support system, which is unequalled in any other EEC member State. Let us stand firm and united in support of our marketing system and our agricultural industry, which are operating so successfully.

11.47 p.m.

Mr. John Wells: I shall confine my remarks to the Hops Marketing Board and the orders affecting hops.
My hon. Friend the Member for Salisbury (Mr. Hamilton) has spoken with great expertise and warmth on this subject, and we are all grateful to him. One of his remarks may have slipped by unnoticed by some hon. Members. He reminded us that the Hops Marketing Board is the senior and most successful board. It is maintained by producers and costs the country virtually nothing.
As the thin end of the wedge to replace it, we are being offered a European

system which may be excellent for the small acreages of German producers who are in almost exactly the situation which the growers of Kent faced 40 or more years ago.
Are we not absolutely mad to allow the Minister to consider the imposition of a system which operates at the taxpayers' expense in lieu of one which costs the taxpayers nothing? It would be disastrous to step backwards in this way and cost ourselves money.
The hon. Member for Londonderry (Mr. Ross) said that he did not understand the term "structural surplus". It just means that too much of a product is being grown. Lamentably, it applies particularly to apples and hops in the EEC—crops which are often grown side by side on the same holding. One naturally has to grow slightly more hops than are required in order to provide a leeway against bad years, and that is why orderly marketing is needed.
The surplus of apples in Europe makes it all the more important that growers in Kent, Herefordshire, Worcestershire and Hampshire should get protection. They are generally the growers who are producing hops as well, and it is imperative that they are protected.
My only quibble with the admirable speech of my hon. Friend the Member for Salisbury was over his statement that we could not expect eight countries to go along with one. I think he is wrong. After all, no hops are grown in Italy or Ireland. I doubt whether many hops are grown in the great Duchy of Luxembourg. Some are grown in France. But, really, we have only to persuade four countries to go along with us. Because our system is pre-eminently good, that should not be beyond the capacity of a forceful negotiator like the Minister of State.

11.51 p.m.

Mr. Jerry Wiggin: I shall be brief because I know that the House wants to hear the Minister answer this excellent debate.
This debate has not really been about hops and potatoes; it has been about the whole principle of marketing boards. It is the clause in the Treaty of Rome which is aimed at monopolies which has produced the Commission's initiative for these directives. Both in our arguments


with Brussels and as Conservatives, we have to defend the monopoly elements of marketing boards.
I restrained myself from interrupting my hon. Friend the Member for Salisbury (Mr. Hamilton) when he was rightly singing the praises of the Hops Marketing Board. One of the greatest things about it is that the brewers have accepted the hops through that organisation and not attempted, as they could have done, to break its monopoly. They have realised that it has been in the interests of the consumer to have an organisation producing the quantity and quality of hops required and dealing with all the intricate problems it handles. But it would be wrong to argue this immensely complicated case tonight.
The main problem of all EEC countries—indeed, of all Western food-producing countries—is not just marketing but the constant endeavour of all Governments, using all means available to man, to marry the supply of and the demand for agricultural products. No matter what the product, that is the constant difficulty. Our marketing boards so far, provided that they have had the full monopolistic powers under the marketing boards legislation, have been more successful than any other system in the world.
I would go so far as to say that the very fact that both the Potato Marketing Board and the Hops Marketing Board have a quota system has greatly helped their success. It is significant that boards which have failed have done so through failure to limit supply to meet demand.
As we become increasingly familiar with Brussels and the operations of the EEC, it is clear to us all that what really matters is the attitude of the Government of the day—of whatever party—in negotiating the interests of this country. Although my hon. Friends have dealt with the details of this matter with great expertise, it is our duty to impress on the Minister our unanimous view that the marketing boards of this country have been one of the great successes of the agricultural scene of the last 45 years. Ministers who go to Brussels to negotiate this matter must do so with a determination backed by the unanimity of the industry and this House.

11.54 p.m.

Mr. Nicholas Winterton: I shall speak for about 50 seconds. I have been stimulated to react to this debate, which has been very interesting and of profound importance to the House.
From the Order Paper, one would have thought that this would be a dull and unimportant debate. It certainly has not been. It has been fascinating and of profound importance to the future of agriculture. Every speech has been useful and has added something to the argument we have been putting to the Minister.
I cannot believe that the future of the Common Market will be based on the destruction of successful and proven systems in this country. I believe that the message that the Minister must take to Brussels is that we believe in our marketing boards, that we intend that they should remain to play their part in the future of agriculture in this country, and that we believe that Europe as a whole should take them on board. We look to the Minister not to let this House down.

11.55 p.m.

Mr. Bishop: At this late hour—but not too late to discuss such an important issue as this—I feel that much of the criticism that might have been sent in my direction was emphasised for Brussels to hear. I welcome the strong views that have been put forward tonight because I know, and the industry knows, that they show the pride that we as a country have in our marketing board system.
I believe that membership of the Community is not a matter of putting all our systems and traditions into a common pot and taking what comes out of it. The essence of the Community, the co-operation that is necessary, and the changes that are necessary to ensure the utmost efficiency in agriculture and food production in the Nine must lie in an acceptance and recognition of those countries that have efficient and well-proven institutions on which their agricultural output is based, and the acceptance that in this country we have an agriculture system with production methods and traditions that are second to none. It is with that sense of pride


that I take on my responsibilities in the Ministry.
With regard to exports, everywhere I go I find that other countries recognise the lead that we have in producing so much by such a small percentage of our population. Other countries envy us. We must stand firm on a number of issues. There is no difference between the two sides of the House on this matter.
In my opening speech I made some comments that caused the hon. Member for Westmorland (Mr. Jopling) to be doubtful about the stand that the Government had taken. I said that I wanted to emphasise what my right hon. Friend and I have stressed several times, namely, that marketing boards on the whole have performed a worthwhile job in providing a marketing structure that has given confidence to our producers, guaranteed a fair return and given security of supplies. I said that, while we may not be able to preserve the structure of our boards—indeed not entirely—we shall seek to ensure that the functions essential to orderly marketing are preserved.
The hon. Member for Westmorland huffs and puffs and says that that is not good enough, but then he says that these things are not sacrosanct and that on accession to the Treaty of Rome some adjustment was necessary. What really matters is that the functions and objectives of the boards are preserved. There may have to be some adjustment. We may not be able to keep the boards indefinitely in the form in which they have existed for many years, but we want to make sure that those whom they serve are given the kind of support, assurance and confidence that has been a feature of our boards.
The hon. Gentleman quoted my comments in July. I am on record several times, as are many of my hon. Friends, as saying,
there is a great deal of pride in the way in which our Milk Marketing Boards and the other boards carry out their functions. Membership of the Community necessitates changes in marketing arrangements for a number of commodities.
The hon. Member for Westmorland has said that. I went on to say,

Our aim is to maintain the functions of the marketing boards, including the MMB, which are essential to the orderly marketing of the products concerned."—[Official Report, 8th July 1976; Vol. 914, c. 1583.]
That is the message that we take to Brussels. Our officials have been working on the review of the Commission documents on the basis of that kind of philosophy. Ministers of Agriculture and other members of the Government have said much the same. The point is that we have to ensure that in any changes which come about this principle is maintained. The role of the producer groups is a feature of the changes to the marketing boards for hops and potatoes.
Mention has been made of the Potato Marketing Board, another board in which we take a pride. EEC negotiations are still at an exploratory stage. It is important to work towards a Community regime that is satisfactory to producers and consumers and then to consider the Board's role. I was asked whether the Board can be accepted as a producer group. This clearly depends on the definition of "producer group". The Board's constitution at present would not comply with the current definition in a number of important respects. We are in touch with Brussels on these matters and have made our views known to the Community.
The hon. Member for Salisbury (Mr. Hamilton) is a member of the Hops Marketing Board. He has made a useful contribution to the work of the Board and will be aware of some of the proposals before it. I have confidence that these proposals, if we can get them accepted by the Community, will commend themselves to the industry as a whole as well as to the present members of the Board—

It being one and a half hours after the commencement of proceedings, the Adjournment of the House lapsed without Question put.

Orders of the Day — POLICE (SCOTLAND) BILL

Order for Second Reading read.

To be read a Second time this day.

Orders of the Day — SOUND BROADCASTING (JOINT COMMITTEE)

Ordered,
That the Lords Message of 25th November relating to the Joint Committee of both Houses to consider the implementation of the Resolutions of both Houses in favour of the establishment of a permanent system of sound broadcasting of their proceedings be now considered.—[Mr. Coleman.]

Lords Message considered accordingly.

Resolved,
That this House doth concur with the Lords in the said Resolution.—[Mr. Coleman.]

Message to the Lords to acquaint them therewith.

Orders of the Day — PROCEDURE (SESSIONAL COMMITTEE)

Ordered,
That the matters of the calling of second amendments, the method of raising points of order during divisions, voting on Opposition motions on Supply days and motions relating to the Business of the House which direct the Chair to bring specified business to a conclusion at certain times, be referred to the Sessional Committee on Procedure.—[Mr. Coleman.]

Orders of the Day — MULTI-ROLE COMBAT AIRCRAFT (RUSSIAN MATERIALS)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Coleman.]

12.1 a.m.

Mr. J. W. Rooker: I propose to raise in this Adjournment debate the subject of the dependence of the multi-role combat aircraft on Russian supplies of strategic materials. I raise this subject as someone who has been a Member of this House for almost three years and has yet to cast a vote in favour of defence expenditure. That might seeem a paradox, but this debate concerns an employment problem. There is nothing I or my colleagues can say or do that can in any way prevent production of the MRCA. That is not an issue to which I wish to refer. In late July I received representations from the British titanium industry the chief firm of which is in my constituency—about the problems of the industry generally, concerning tariff barriers and Japanese and American

imports. I asked several Questions on the matter and wrote to the Minister. During the Recess I visited the company in my constituency. While I am an engineer, I am not a metallurgist, although I just scraped through the metallurgy part of my degree. That was long before titanium was in the syllabus. I said to the firm "Give me a brief I can understand. What is titanium? Where does it come from? What does it look like?"
I was given certain documents, one of which was prepared by the British titanium industry for the use of the Common Market Commission in the GATT negotiations dealing with the question of tariffs on titanium. This document was dated 28th April 1975 and contained a paragraph which is worth placing on the record. The paragraph said:
It is particularly important to recognise that in large sectors of the EEC aircraft market non-EEC titanium may be brought in duty-free either as a result of special agreements between the governments concerned in international projects (e.g. Concorde and MRCA) or because of normal duty drawback procedures where exports are involved. Whilst it must be accepted that little can be done about the latter case, it is patently absurd that national governments should, by deliberate and special agreements even on military projects such as the MRCA, expose the materials suppliers to the aircraft industry to open competition from foreign sources, particularly when those sources themselves have complete protection in their own markets.
As someone with an eye to the main story, and concerned as to what I could raise on the titanium issue, I asked for a translation of that paragraph. I was told that, broadly speaking, the position is that the MRCA is an Anglo-German-Italian project and that the German subcontractors and the British sub-contractors of the MRCA. building the aircraft, each require to use titanium for the parts of the aircraft they are building. There is in Britain a titanium metal manufacturer. In Germany there are two. There is one further titanium metal manufacturer in France.
I was further told that the German sub-contractor building the wing boxes of the MRCA—quoted in certain magazines and technical journals as the structural heart of the aircraft-uses titanium produced by Krupps in Germany. But the British company emphasised that in order to produce titanium as a metal it


is necessary first to go through a preliminary stage after the ore rutile has been dug out of the ground. That means that a substance called titanium sponge is produced, and that is a necessary first stage in the production of titanium metal.
It was explained to me that in the whole of Europe geographically there are only two producers of titanium sponge. One is in Britain and the other is in the USSR. I was also told that the German metal manufacturer, in order to produce the titanium metal for the MRCA—funded by the taxpayers of Germany, Italy and Britain—is buying his sponge from the USSR.
I expressed disbelief at this, quite frankly. They could not give me anything in writing to prove it, and obviously it was a matter that I wished to take up with the Ministers. I did this on return to the House after the recess. On 25th October 1976 I asked the Secretary of State for Defence what country is the source for titanium sponge used in the manufacture of titanium for the MRCA. I was given the answer that it was Britain and Russia.
A week later, on 2nd November 1976, I asked the Minister of Defence what quantity of titanium sponge has been purchased from the USSR for use in the manufacture of titanium for the MRCA. I was told that certain of the information I requested was not available but that Russian sponge accounts for 35 per cent. of the sponge used in the manufacture of titanium alloy. Since then my hon. Friend has corrected it to 50 per cent. that is received from the USSR for use in the manufacture of titanium alloy.
This is not at all a happy situation, and one has to ask the reasons for it. I have been told that the Germans are doing it because it is cheaper to buy Russian titanium sponge than to buy British titanium sponge. I do not think that this is a satisfactory explanation—first, because of the strategic implications and, secondly, because of the job implications.
As for the strategic implications, it is not just the fact that the MRCA will be NATO's major defence strike weapon of the next 20 years to defend NATO countries, we presume, from Warsaw Pact countries headed by the USSR. There is also the fact that the titanium industry

is relatively new, certainly having started within the last 30 years. Britain happens to be, along with Japan and America, at the forefront of world technology in the production of titanium alloy. Titanium alloy will take over from stainless steel as the metal of the next half-century. Certainly it will be used widely in desalination plants because of its corrosion resistance and its extreme strength.
Any action at all that undermines the basis of our own industry, such as orders which could have gone to Britain going to the USSR—in the case of a product which is funded partly by British taxpayers—can serve only to set back the advance of British technology in this area. That is why I thought that we should have this short debate.
It is a fair point to make that the EEC normal common external tariff of 6 per cent. to 8 per cent. is waived for these Russian supplies.
Why have the Russians got these large supplies of titanium sponge available so cheaply? They could have them available at a much higher price. It is easy to say that they are dumping the material in an effort to undermine NATO. It is more subtle than that. For many years the West has considered that Russia was fairly advanced in the production of titanium metal alloys. The Russians built up an industry. They export titanium metal in various forms around the world. It was widely thought that many of their major defence projects contained vast quantities of titanium metal.
Two or three months ago a Russian pilot flew a Foxbat aircraft to Japan. It was widely thought that that aircraft would contain a great deal of titanium. However, according to a news item in the weekly magazine The Engineer for 4th November of this year, the aircraft was found to contain no titanium whatso-ever. However, it is known that the Russians had built up the industry. The conclusion drawn by the magazine was that the Russians had not perfected the conversion techniques necessary to produce high quality alloys. They had setup an industry to the extent of getting the ore out of the ground and producing the sponge.
The Russians had a surplus of a commodity which was in short supply in the


West, because there was only one producer in Western Europe. The Russians had a commodity which they could not do anything with. It was therefore easy for them to come to Europe and say "We have plenty of this material." It was then all right for Krupp to say "We are buying it from a cheap source. It is a commercial deal. We must do our best for the German taxpayer, as the British would for the British taxpayer. We can buy it from Russia cheaper than we can buy it from Britain." That is the argument the Germans would advance.
This is a bad blow for the British industry, which is in many ways the Western European industry, because we have the only plant in the whole of Western Europe producing this stage in titanium.
I do not think that the matter can be left there. My hon. Friend the Minister of State must do some work on this, because the MRCA is only in a preproduction stage. I understand that production of the 800 aircraft at £7 million each will not start until 1978. We are talking about a great deal of taxpayers' money. I should like an assurance from my hon. Friend that an attempt will be made to secure that the material—the sponge—required for the production run of the MRCA will be obtained from Britain.
It will be argued that it is unfair to expect the Germans to take the metal from Britain, because they have their own plant. I should like an assurance, however, that the sponge required for the production run will be obtained from Britain and that the excuse given by the manufacturers—that they can get it from Russia cheaper—will not be accepted.
The defence aspects must be examined. When I have raised these matters the question has been posed to me: once the aircraft are built, what problem will there be if the Russians turn off the supply of sponge? That is a fair point, but in the meantime over the years when the MRCA has been built, if the British industry has been undermined to a serious extent this will be a tragedy.
So far there have been no mass sackings. Many jobs have been lost, but this has occurred through natural wastage. If there are any major turndowns in the in-

dustry in Britain, there will be nowhere else for the workers to go to work. Production engineers, technicians and scientists are one-product employees. There are no firms manufacturing metal other than the two subsidiaries of IMI and the ICI company which produces the sponge. This is an industry which must be protected because of the potential the material has for widespread use in future in power station and desalination plants.
In the space of a few years, especially if drought conditions prevail in our summers, we shall have to spend large sums of money on getting salt out of sea water. One of the major problems so far has been the corrosion of materials. Titanium can overcome that problem.
For how long have the Government known that the Germans were buying their sponge from Russia? Has this come to light only in the past 18 months or so? The MRCA as a product has been around for a long time.
I come to what I regard as one over-riding reason why we should persuade the Germans, and use our muscle to do so, that they should buy the British material. I know that many of my hon. Friends are concerned, since the Prime Minister's broadcast on "Panorama" a few weeks ago, about support costs for the British Army of the Rhine. What could be a better way for the Germans to show that they are willing to spend money in Britain to offset the costs of the British Army of the Rhine than to buy the British material? That would not only help the British industry but would help the European industry, too, in which we are the only supplier.
It is important to protect the industry. In the end, if we fail to supply the sponge, the French, German and British manufacturers of the alloy will have no choice but to go to Japan, America or Canada in the event of the Russians turning off the supply. Why should we put them into the position of again having to turn to the Japanese for a supply of the material if we have in the meantime run down our own industry?
That is what will happen unless we treat this most important industry seriously. I realise that the MRCA is not constructed wholly of titanium. Titanium forms only a small part of the weight, but the total production of the metal in


Europe is only about 6,000 tonnes a year anyway. It is very expensive, there are very few suppliers, and the potential for use in industry is enormous.
I have raised the defence aspects of the matter tonight, and I shall raise other aspects with other Ministers on other occasions. Butthe defence aspect is important, and so far the greatest use of the material has been in defence projects. The position is the same, however, in the Concorde project, a civil project. I am told—I am waiting for confirmation—that the French suppliers of the material for the Concorde project are buying titanium sponge from Russia. That sort of thing is outrageous, when both projects are funded in the various countries involved at enormous cost to the taxpayer. The cost to Britain will be over £2,000 million over the years. There ought to be a policy that purchases are made within the countries producing the project if at all possible. It is clearly possible to buy the material from one of the three participating countries in the MRCA project: namely, Britain.

12.18 a.m.

The Minister of State, Ministry of Defence (Dr. John Gilbert): First, I congratulate my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) on getting this debate. I know that it involved him in considerable persistence. In fact, he tried in the last Session and was unfortunately thwarted by an untimely Prorogation. I am grateful to my hon. Friend also for his courtesy in giving me notice of the points that he wished to raise.
My hon. Friend has drawn attention to his concern over what appears to him to be an unhealthy reliance on Russian supplies of strategic materials for the MRCA project. I should, therefore, make clear at the outset that the titanium sponge which is used for the production of the titanium alloys is the only material employed in the production of the MRCA —or the Tornado, as it is more popularly known—which is, so far as I am aware, obtained either from the Soviet Union or from any other of the Warsaw Pact countries. Furthermore, about half of the titanium used in the procurement of the MRCA is obtained from United Kingdom sources, using United Kingdom-produced sponge.
Having said that, I concede that my hon. Friend's concern about the use of titanium based on Russian sponge in the Tornado by firms in the Federal Republic of Germany and in Italy is quite understandable. But I think that we should look at the question in the context of the fact that the Soviet Union is the world's main producer of titanium sponge, and the high levels of exports to the United States and Western Europe have been made possible by the relatively low price at which she has been prepared—I emphasise "at which she has been prepared"—to sell this material.
It has been appreciated for some time that the Soviet Union has acommanding position in the titanium sponge production industry, at present producing about 55 per cent. of world supply and the bulk of her exports going to the United States and Western Europe.
It appears to us—here I take mild issue with my hon. Friend—that the Soviet Union's prime motivation has been to meet her urgent need for foreign currency. Indeed, she has pitched her prices below the generally prevailing levels. That has had a severely depressing effect on the ability of ICI—the one Western European titanium sponge producer—to remain commercially viable. Given the likelihood that Soviet as well as world requirements for titanium will increase in the period ahead, it seems to us probable that the Soviet Union will not be able to increase its exports markedly from their present levels.
However, it would remain open to Russia either to increase her exports in the interests of undermining the existing Western sponge production industry or to reduce her exports for strategic reasons. But while her requirements for foreign currency remain, there will be pressure against her adopting the latter course.
From the point of view of the purchasers of the MRCA—as my hon. Friend pointed out, in the last resort they are the taxpayers in the United Kingdom, West Germany and Italy—there can be no doubt that the use of this source of supply has reduced the costs of production of the project. It has thus been a matter of good financial housekeeping for the German and Italian firms involved in the Tornado project to purchase their alloy derived from this source of sponge. They


have merely been following good commercial practice.
It is worth considering the question of costs in dealing with the use of materials in a project of this kind. Very close attention has been given at all stages of the project to the control of costs. I have already informed the House that, after allowing for changes in economic conditions and exchange rates over seven years, the cost of the Tornado has risen by about 40 per cent. of the estimate made in 1969. That is a substantial increase. But since the start of full development, which is the more appropriate base from which to measure change, it has been only about 20 per cent., which is an exceptionally small increase in real terms during such a programme. This emphasis on close cost control, which has characterised the handling of this project, is a factor which no doubt played a part in the decision of the firms concerned within the Federal Republic of Germany and Italy to use alloys derived from Russian supplies of titanium sponge.
I should make it absolutely clear that, whatever the considerations put forward by my hon. Friend—I have a certain sympathy with what he said about employment problems in his constituency—it is always a matter of judgment when making a procurement decision involving foreign purchases where the balance of advantage lies between a low-cost source and employment considerations in one's own country. I have no power to instruct our allies where they should buy their raw materials, let alone to seek to induce them to buy from other than the lowest cost sources, assuming that the quality of the material supplied is adequate. On that last point, I hasten to add that I am advised that there are no technical risks involved in the use of Russian titanium sponge.

Mr. Rooker: My hon. Friend said that the Russians sell a lot of titanium sponge to the United States of America. That is fair. Perhaps I am moving away from a defence point, but the Americans stick a 25 per cent. tariff on it, unlike the Common Market which has reduced tariffs to zero, and that has a direct effect on undermining the British industry.

Dr. Gilbert: If my hon. Friend will bear with me, I shall be coming to the question of tariffs. I am trying hard to meet the time constraint under which I am labouring. I was talking about quality control. I was about to say that rigorous quality control is exercised at the stage when the alloy is produced. The risk of manufacturing defective alloy is considered to be no greater when using Russian sponge than any other.
Some British titanium alloy is already used by Germany and Italy within the MRCA project. This could be a profitable area for future expansion of the British industry as we approach peak production on the project. British produced titanium is already used for the British element of the Tornado programme. Therefore, whatever the future purchasing practice among our partners, the United Kingdom's titanium industry will benefit greatly from the project as production reaches its peak level in the years ahead.
My hon. Friend is properly concerned about short-term problems. Apart from having to compete with Russian supplied titanium sponge at low prices abroad, ICI has been obliged, under the anti-inflation policy, to sell its sponge at levels well below world prices within the United Kingdom.
Both ICI as a producer of sponge and IMI as a producer of wrought titanium enjoy some protection for the United Kingdom national defence aerospace projects. I concede at once that that protection does not extend to multi-national military aerospace projects, civil projects, or non-aerospace activity, and so the effects are now rather less significant than they have been.
The Government have not been un-aware of the general considerations raised by my hon. Friend. The Department of Industry, the Department responsible for the formulation of Government policy for the British titanium industry, has been keeping a close watch on the position. It has been holding regular discussions with both ICI and IMI, and has recently told the industry that it proposes to examine the future aerospace requirements of the Ministry of Defence in this area with a view to establishing a firmer basis for future production levels, and to do what it can to improve the


tariff position for the United Kingdom industry through GATT negotiations.
My hon. Friend referred to EEC tariffs. That is a matter for my right hon. Friend the Secretary of State for Trade. I understand that, as my hon. Friend said, at present there are no EEC tariffs imposed on the importation into the EEC of any titanium sponge. The current order to this effect is due to expire in June 1977. I understand that the Department of Trade has been going through an annual exercise of consulting the industry about this tariff in January. In the course of that consultation it has spoken to ICI, the sole United Kingdom producer of sponge, which has not objected in the past to the nil tariff. However, the Department of Trade intends to have further consultations with the industry next month with a view to taking up aposition about the expiry of the order next June.
I can assure my hon. Friend that the Department of Industry is anxious to maintain the present level of production both of titanium sponge at ICI and titanium alloys at IMI. The Ministry of Defence has been monitoring the position for some time and both Departments have been engaged in a study of future requirements for titanium, the likely future capacity of the British industry, the continued availability of overseas supplies and the likely future price of titanium on the world market.
I agree with the fears that my hon. Friend expressed about the danger that this important project may become over dependent upon Russian supplies of sponge. We and our partners must keep a close watch on the balance of advantage and all the factors involved. I appreciate the need not to overlook other factors in weighing the advantages to the overall cost of the project by seeking to buy titanium at its cheapest market price. However, I am confident from the re-

searches that I have undertaken since my hon. Friend first raised the issue with me that if supplies from the Soviet Union were suddenly interrupted for any reason, neither the MRCA nor important domestic requirements would be affected. However, we shall be keeping the supply and demand position under the closest scrutiny in conjunction with my right hon. Friend at the Department of Industry.
My hon. Friend has dwelt at some length upon the need to capitalise on the work opportunities arising from this project, a desire that I naturally share. I must make it clear that under the arrangements agreed with our partners the work is distributed among the partner nations as far as possible in proportion to their eventual purchase of aircraft. The importation of Russian sponge for the MRCA does not count against the United Kingdom share of production work, which should amount to about 47·6 per cent. of the total employment generated by the project.
I hope that I have been able to say enough to set at rest at least some of the fears expressed by my hon. Friend about certain aspects of this extremely important project. It is a programme that at present is providing about 16,000 jobs in this country. Including supporting work, it can be expected to provide approximately a further 20,000 jobs at the peak level of production. This gives some indication of its great importance to industry.
I hope that I have been able to reassure my hon. Friend that the Government are concerned to see that the health of this important industry, in which his constituents have a keen interest and which he has sought to protect tonight, will be assured for the future.

Question put and agreed to.

Adjourned accordingly at half-past Twelve o'clock.